What Happened?
A number of stocks jumped in the afternoon session after analysts at Bernstein highlighted a potential recovery for the sector in 2026. After a challenging 2025 marked by weakened consumer confidence, the firm anticipates a gradual traffic recovery.
Several factors could stimulate consumer demand, including an upcoming Tax Bill and the U.S.-hosted Soccer World Cup, with effects potentially starting in the spring. This optimistic outlook was supported by restaurant valuations hitting 10-year lows, suggesting significant upside if consumer spending data improves. Following a period where households cut back on dining out due to inflation, larger tax rebate checks are also seen as a potential catalyst for a rebound in casual dining.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Traditional Fast Food company Jack in the Box (NASDAQ:JACK) jumped 8.2%. Is now the time to buy Jack in the Box? Access our full analysis report here, it’s free for active Edge members.
- Sit-Down Dining company Kura Sushi (NASDAQ:KRUS) jumped 4.2%. Is now the time to buy Kura Sushi? Access our full analysis report here, it’s free for active Edge members.
- Traditional Fast Food company Starbucks (NASDAQ:SBUX) jumped 4.3%. Is now the time to buy Starbucks? Access our full analysis report here, it’s free for active Edge members.
- Traditional Fast Food company Wendy's (NASDAQ:WEN) jumped 3.3%. Is now the time to buy Wendy's? Access our full analysis report here, it’s free for active Edge members.
- Sit-Down Dining company The Cheesecake Factory (NASDAQ:CAKE) jumped 3.2%. Is now the time to buy The Cheesecake Factory? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Jack in the Box (JACK)
Jack in the Box’s shares are extremely volatile and have had 52 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 dropped 3.3% on the news that 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.
Jack in the Box is up 9.7% since the beginning of the year, but at $20.55 per share, it is still trading 51.7% 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 $212.66.
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