DRI - Cracker Barrel: Valuation Finally Starting To Improve

• Cracker Barrel released its fiscal Q3 2021 results in late May, reporting a more than 3% decline in net sales relative to fiscal Q3 2019 levels.
• While CBRL expects flat sales in fiscal Q4-21 on a 2-year basis, the weaker sales growth represents a much slower recovery relative to industry leaders like TXRH and DRI.
• With Cracker Barrel trading at just 15.5x FY2022 earnings estimates with a 2.90% yield, the stock is reasonably valued and offers a solid yield relative to the S&P 500.
• However, with no clear technical support below until $117.00, and only a moderate margin of safety relative to fair value, I believe there are better opportunities elsewhere in the market.

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