JACK

AI MemoPost-earnings T+3

Jack in the Box

As of 2026-05-16/Post-earnings T+3/Confidence medium

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Data freshness

AI Memo

As of 2026-05-16 • Model: RankAlpha Sentiment Codex

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Action

—

Confidence

medium

Horizon

—

Key catalyst

Q2 print and CEO change reset the near-term thesis • 2026-05-13

Expected move: -10%

Biggest risk

The bearish read is stronger on primary evidence: sales, transactions, and margins are still falling, guidance still implies a sales decline for FY2026, and closures are set to accelerate. Secondary coverage also showed UBS cutting its target to $14 from $23 while keeping a Neutral rating after the print, which suggests analysts still see weak sales and limited visibility.

Invalidation

Break below $8 or thesis failure.

What would change my mind?

The constructive read is that Q2 showed a modest operating EPS beat versus secondary-source consensus, management said trends improved into Q3, and the new interim CEO is explicitly pushing same-store sales, margins, and debt reduction. Post-print reaction from coverage was not uniformly negative: StockAnalysis surfaced a Stifel Hold note with a target increase to $15 from $10.

Research note

Recommendation

—

Confidence

medium

As of

2026-05-16

Base target

$12

p=45%

Bull target

$15

p=25%

Bear target

p=30%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

Traffic stabilization versus closure and margin pressure is the next operating checkpoint
Debt paydown and refinancing execution remain core to equity durability
The constructive read is that Q2 showed a modest operating EPS beat versus secondary-source consensus, management said trends improved into Q3, and the new interim CEO is explicitly pushing same-store sales, margins, and debt reduction.

BearKey bullets

Balance-sheet risk is still material because the company is managing note prepayments and refinancing against restrictive securitized debt terms flagged in the 10-K [#10-K-2025-11-19].
CEO and customer leadership departures create execution risk during a period when the company is also using retention awards to stabilize key executives [#8-K-2026-05-13].
Margin pressure persists from 5.0% commodity inflation, unfavorable mix, and sales deleverage; restaurant-level margin fell to 16.4% from 19.6% a year earlier.

WatchKey bullets

Q2 print and CEO change reset the near-term thesis

Summary

High-level snapshot

Recommendation

Model confidence

medium

Timeframe

Asset

Equity

Trigger

Post-earnings T+3

Base case: $12 (p=45%)

Bull/Bear spread: +18% / -41%

Vs latest close: Bull +18% · Base -10% · Bear -41%

Scenario probabilities

Bull Target: $15 (p=25%)Base Target: $12 (p=45%)Bear Target: $8 (p=30%)

Commentary

This was a T+3 post-earnings follow-up, and the evidence remains cautious rather than thesis-changing bullish. Primary company materials dominate the read: the May 13, 2026 earnings release and 10-Q showed softer sales, lower margins, updated but still weak full-year expectations, and a same-day CEO transition. Trusted secondary coverage suggested a small EPS beat but a revenue miss versus consensus, plus mixed analyst reaction with at least one material target cut and one smaller target raise from a low base. With shares anchored at $10.87 on 2026-05-15, the market still appears to be treating the story as distressed turnaround monitoring, not confirmed recovery.

As of 2026-05-16 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Bear Case

Drivers

Scannable catalysts and supporting factors

Traffic stabilization versus closure and margin pressure is the next operating checkpoint
Debt paydown and refinancing execution remain core to equity durability

Scenarios

Bull Target (Scenario probability)

$15 / p=25% prob

Base Target (Scenario probability)

$12 / p=45% prob

Bear Target (Scenario probability)

$8 / p=30% prob

Price $13 as of 2026-06-02

Nearest Scenario: Base (∆ 10%)

Targets vs latest close: Bull +18% · Base -10% · Bear -41%

Sentiment & Exposure

News Sentiment (30d)

-0.35

Social Sentiment (7d)

0.00

Events

Other notable items detected

EVENT2026-05-13
Q2 print and CEO change reset the near-term thesis
The May 13, 2026 earnings release showed Q2 same-store sales down 3.8%, revenue down 4.3% to $254.3 million, and operating EPS of $0.76, while management said results did not meet expectations but trends improved into Q3. The same 8-K also disclosed Lance Tucker's departure and Mark King's appointment as interim CEO, making the next few months an execution-and-credibility reset rather than a clean recovery call [#8-K-2026-05-13] [#10-Q-2026-05-13].
Prob 85.00% • Move 11.00% • Priced-in 72.00%

Short-term Catalysts

Next few weeks

Traffic stabilization versus closure and margin pressure is the next operating checkpoint
2026-08-01
Primary filings show Q2 transaction weakness remained the main issue, with company-operated transactions down 4.3%, commodity inflation at 5.0%, restaurant-level margin down to 16.4%, and fiscal 2026 still calling for low-single-digit same-store sales decline plus 50 to 100 closures, most in the franchise base. Management's claim that trends improved into Q3 now needs proof against still-negative traffic and closure acceleration in the back half [#8-K-2026-05-13] [#10-Q-2026-05-13].
Prob 70% • Move 9% • Priced-in 63%

Long-term Catalysts

Months to a year

Debt paydown and refinancing execution remain core to equity durability
2026-08-31
After already prepaying $105.0 million in January, the company said it is withdrawing about $71.0 million of excess COLI funding and expects to use that plus cash on hand to prepay about $99.0 million of 2019-1 Class A-2-II notes in Q3 FY2026, while also actively pursuing refinancing of the August 2026 and February 2027 note tranches. If that balance-sheet work lands cleanly, survivability and valuation pressure can improve; if it slips, leverage stays a major overhang [#10-Q-2026-05-13].
Prob 60% • Move 16% • Priced-in 48%

Risks

Balance-sheet risk is still material because the company is managing note prepayments and refinancing against restrictive securitized debt terms flagged in the 10-K [#10-K-2025-11-19].
CEO and customer leadership departures create execution risk during a period when the company is also using retention awards to stabilize key executives [#8-K-2026-05-13].
Margin pressure persists from 5.0% commodity inflation, unfavorable mix, and sales deleverage; restaurant-level margin fell to 16.4% from 19.6% a year earlier.
The plan still includes 50 to 100 fiscal 2026 closures, mostly franchised units, and management said visibility into timing is limited as JACK on Track proceeds.
Traffic remains the central problem: Q2 company-operated transactions fell 4.3% and system same-store sales fell 3.8%.

Peers

Symbol	Summary
LOCO	El Pollo Loco is a direct small-cap restaurant peer where traffic resilience, value messaging, and franchise health matter similarly.
PTLO	Portillo's is a relevant restaurant peer for comparing traffic recovery and margin execution in a pressured consumer environment.
NATH	Nathan's is a useful asset-light franchised restaurant comparison for royalty durability and capital-allocation discipline, though the concept mix is not identical.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment Codex
Human targets: serper
Analysis date: 2026-05-16

AI Stock Memo: JACK - Jack in the Box - RankAlpha