DRI - Jack In The Box: Internal Battles In A Compelling Industry Warrant A 'Hold'
Investment Thesis
Amid a leadership transition forced upon by the under-performing franchisees, Jack in the Box Inc. (JACK) was already afflicted with uncertainty when the coronavirus outbreak hit U.S. shores. Despite a significant off-premise business, the company, with no overseas presence unlike its peers, is not fully immune from a lengthy sales downturn as the lockdowns stretch on. The ensuing economic downturn could squeeze consumer spending, preventing a faster sales recovery. Our forecasts for the NTM (next-12-month) period indicate a declining top-line with narrowing margins.
However, with an undrawn credit facility, and having