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Why Jack in the Box (JACK) Stock Is Up Today

JACK Cover Image

What Happened?

Shares of fast-food chain Jack in the Box (NASDAQ: JACK) jumped 3.5% in the afternoon session after a key inflation data (PCE) aligned with forecasts, bolstering hopes for continued interest rate cuts from the Federal Reserve. 

The Personal Consumption Expenditures (PCE) price index, the central bank's preferred gauge of inflation, showed a slight year-over-year increase in August but did not surprise economists. This report was met with relief on Wall Street, as it suggests inflationary pressures remain contained, giving the Federal Reserve more leeway to continue its monetary easing policy. Investors interpreted the news as a positive sign that the Fed can support the economy without risking runaway inflation. The positive sentiment helped the major indices claw back some of the losses from a recent three-day slide, with stocks rising across various sectors.

After the initial pop the shares cooled down to $20.31, up 4.7% from previous close.

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What Is The Market Telling Us

Jack in the Box’s shares are extremely volatile and have had 39 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 15 days ago when the stock dropped 1.4% on the news that Stifel reiterated its 'Hold' rating on the stock, citing significant concerns about weakness in same-store sales. 

The investment firm highlighted that ongoing immigration policy challenges are likely to create sustained sales pressure for the fast-food chain. This follows Jack in the Box's recent third-quarter earnings report, which missed analyst expectations and revealed a 7.1% downturn in same-store sales. The company specifically attributed the decline to a noticeable drop in spending from its core Hispanic consumer base amid an "uncertain" environment as immigration enforcement intensifies. Other analysts have expressed similar caution, with Goldman Sachs maintaining a 'Sell' rating and Piper Sandler lowering its price target on the stock.

Jack in the Box is down 50.4% since the beginning of the year, and at $20.31 per share, it is trading 60.6% below its 52-week high of $51.52 from November 2024. Investors who bought $1,000 worth of Jack in the Box’s shares 5 years ago would now be looking at an investment worth $251.41.

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