11:32 AM EDT, 08/19/2024 (MT Newswires) -- Jack in the Box's (JACK) growth potential, especially with further Del Taco refranchising, is "undervalued" compared with its fast-food hamburger restaurant peers, BofA Securities said in a note Monday.

Analysts, including Sara Senatore, said that they are updating their forecasts for Jack in the Box to better match the timing of new store openings. Although the development agreements are expected to be successful, new stores will likely open more gradually over the five-year period.

The analysts revised their earnings estimate for Q4 2025 to Q3 2026 from $7.72 to $7.37. "This is a material discount to highly franchised peers, given historically slower growth and more capital-intensive ownership model," they added.

BofA Securities lowered its price target on the company to $72 from $77. The analysts said risks to this price target include potential declines in sales due to economic or competitive factors, rising food and labor costs that could pressure margins, and execution challenges in areas like service speed, menu updates, and marketing, which are crucial for driving sales.

Price: 53.12, Change: +0.26, Percent Change: +0.48