On Monday, Truist Securities adjusted its outlook on Cracker Barrel (NASDAQ:CBRL), decreasing the price target to $60 from the previous $68. The firm continues to maintain a Hold rating on the stock. The revision comes ahead of Cracker Barrel's upcoming 'Strategic Transformation Update' call scheduled for May 16, 2024, at 4:30 pm ET.
Truist Securities anticipates a mixed response to the stock based on several factors. The firm expects Cracker Barrel to pre-announce a negative third fiscal quarter for 2024, with both same-store sales (SSS) and earnings per share (EPS) likely missing expectations. This forecast is supported by data from Truist Card. Additionally, a dividend cut is anticipated.
Despite these negative expectations, the analyst believes that the market may have already accounted for these setbacks. Cracker Barrel's stock has seen a significant decline, dropping 31% year-to-date, in contrast to the S&P 500's 9.5% gain. The stock is currently trading at a 12-year low, excluding the COVID-19 period, and has a 12-month high short interest (S/I) and a 9.2% dividend yield.
The firm also notes that, given Cracker Barrel's low valuation starting point, any announced cost savings during the upcoming call could lead to higher than expected margin and earnings growth. In light of these factors, Truist Securities has revised its estimates and reduced the price target accordingly.
InvestingPro Insights
As Cracker Barrel (NASDAQ:CBRL) prepares for its 'Strategic Transformation Update' call, investors are watching the company's financial health and market position closely. According to real-time data from InvestingPro, Cracker Barrel has a market capitalization of approximately $1.25 billion and a P/E ratio of 14.88, which adjusts to 13.18 when looking at the last twelve months as of Q2 2024. This valuation comes as the company trades near its 52-week low, with the price having fallen by over 23% in the last three months.
InvestingPro Tips suggest that despite short-term liquidity concerns, with short-term obligations exceeding liquid assets, Cracker Barrel has a strong history of dividend payments, maintaining them for 43 consecutive years. The current dividend yield stands at a notable 9.24%, reflecting the company's commitment to returning value to shareholders. Analysts also predict that Cracker Barrel will be profitable this year, a sentiment supported by the company's positive earnings per share over the last twelve months.
For investors seeking additional insights and analysis, there are more InvestingPro Tips available, which can be explored for a deeper understanding of Cracker Barrel's financial performance and stock potential. To access these valuable insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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