TACO - Jack in the Box stumbles as analysts question Del Taco acquisition

Jack in the Box (JACK -2.1%) shares slip after two analysts raise concerns about the company's recent acquisition of Del Taco (TACO +0.3%). The company's $575M acquisition "poses a number of challenges to long-term growth," writes Northcoast analyst Jim Sanderson, downgrading the stock to Neutral from Buy. "We don’t believe franchised store economics will drive cash-on-cash returns.” He adds that Del Taco's margins are under pressure and believes that profitable growth could be threatened even as more stores are added. Meanwhile, Barclays cuts its price target on the stock to $90 from $105 for similar reasons. The average sell-side price target for Jack in the Box is $111.

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Jack in the Box stumbles as analysts question Del Taco acquisition