February 6, 2018

JACK – Market expectations are for record-high Uniform ROA, but management has concerns about industry trends, franchising, and their initiatives


    • Jack in the Box (JACK:USA)¬†currently trades at recent highs relative to UAFRS-based (Uniform) Earnings, with a 27.4x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about industry trends, franchising, and their initiatives
    • Specifically, management may be exaggerating the industry shift towards chicken, and may be concerned about decreases in franchise growth over the next couple of years. Furthermore, they may be concerned about consumers lacking brand loyalty below certain price points, and may also have concerns about the extent of their tech initiatives
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