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Jack in the Box Inc. Message Board

  • bigboneapart bigboneapart Feb 21, 2011 9:41 AM Flag

    Jack P/E at all time high?

    I have been following Jack for over ten years. During that time, the P/E has never been this high (19+). More importantly, it has always settled back after excesses to a "norm" of between 11 and 13. What happen to Jack earnings? Is all the francise sale money flows now gone? I mean, 2 bucks earnings down to 1.25 is quite a drop...and it hasn't seen 2 bucks for many quarters now.

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    • Major turnaround underway deserves multiple expansion. CMG valuation enhances Qdoba investment. Private equity active in the space (Wendys & Peltz). Bottom line: Good things happening. Can work higher.

      • 1 Reply to pmoishe
      • Sounds rather naive to suggest JACK's price earnings ratio is too high. The market is a discounting mechanism, it looks forward, not backward. JACK's year ends about September 30, 2011 and the consensus estimate is $1.62. That puts the PE ratio at 14.8X the estimate which is less than McDonalds for its year ending December. And Big Mac does not have the 5 year growth potential that a revitalized JACK has. Plus, McDonalds already spun off Chipotle, JACK has not yet spun off a very valuable Qdoba operation.

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