What Happened?
Shares of fast-food chain Jack in the Box (NASDAQ: JACK) fell 3.3% in the afternoon session after it completed the sale of its Del Taco subsidiary for approximately $119 million, crystallizing a significant loss on the investment.
The fast-food chain had acquired Del Taco in 2022 for about $585 million, meaning the sale resulted in a substantial financial hit. While the company stated the deal was part of a plan to reduce debt and shift to a business model with fewer physical assets, the transaction highlighted broader financial issues.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Jack in the Box? Access our full analysis report here.
What Is The Market Telling Us
Jack in the Box’s shares are extremely volatile and have had 50 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 2.1% on the news that RBC Capital Markets raised its price target on the stock to $25 from $16 and kept its outperform rating.
This significant increase in the price target suggested a more optimistic outlook from the investment bank on the company's future stock performance. An "outperform" rating generally means the analyst believed the stock would do slightly better than the overall market. The new target of $25 represented a substantial jump from the previous $16 mark, signaling strong confidence from the analyst.
Jack in the Box is down 54.3% since the beginning of the year, and at $18.71 per share, it is trading 56.1% below its 52-week high of $42.58 from February 2025. Investors who bought $1,000 worth of Jack in the Box’s shares 5 years ago would now be looking at an investment worth $199.68.
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