On Thursday, Loop Capital adjusted its outlook on Cracker Barrel (NASDAQ:CBRL), increasing the price target to $55 from the previous $45 while maintaining a Hold rating on the stock. The decision follows Cracker Barrel's release of its first-quarter financial results for fiscal year 2025, which included a mix of positive and negative performance indicators.
According to InvestingPro data, two analysts have recently revised their earnings expectations downward, with analyst targets ranging from $36 to $60.
The restaurant chain reported a 2.9% rise in restaurant comparable sales for the quarter, with an increase in menu pricing by 4.7%. However, this was offset by a 1.8% decrease in traffic. Additionally, retail comparable sales saw a decline of 1.6%. Despite these mixed results, Cracker Barrel announced an adjusted earnings per share (EPS) of $0.45, adjusted EBITDA of $45.8 million, and consolidated revenues of $845 million for the first quarter, which were in line with the company's mid-November pre-announcement.
InvestingPro analysis indicates the company is currently trading below its Fair Value, with a strong return over the last three months despite challenging conditions. The company has maintained dividend payments for 43 consecutive years, demonstrating long-term financial stability.
The revised price target by Loop Capital is based on approximately 8 times the firm's updated fiscal year 2025 enterprise value to EBITDA (EV/EBITDA) estimate for Cracker Barrel. The Hold rating suggests that while Loop Capital acknowledges the company's solid performance in certain areas, it advises investors to maintain their current positions without further buying or selling shares aggressively.
The report by Loop Capital reflects a cautious optimism, recognizing Cracker Barrel's ability to generate revenue growth in a challenging environment but also noting areas where performance has not met expectations. The updated price target provides investors with a new valuation benchmark for the company's stock as it navigates the fiscal year ahead.
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