On Monday, Piper Sandler adjusted its outlook on Cracker Barrel (NASDAQ:CBRL) shares by increasing the price target to $46.00, up from the previous $46.00, while maintaining a Neutral rating on the stock. This revision follows Cracker Barrel's preliminary fiscal first-quarter 2025 announcement, which prompted the firm to update its financial model to reflect anticipated results.
The update to the model by Piper Sandler comes after the company's pre-announcement on Sunday, which led to revised higher same-store sales (SSS) forecasts for both the restaurant and retail segments of Cracker Barrel. Despite the improved SSS estimates, the adjustments were partially balanced by reduced gross margin assumptions for both segments. Moreover, general and administrative (G&A) expense estimates were increased.
Piper Sandler's analysis indicates a nuanced view of Cracker Barrel's performance, with the adjustments in sales forecasts and cost estimates leading to a modest increase in the price target.
The firm's statement emphasized the interest in hearing more about the company's strategic transformation during the upcoming full conference call, suggesting that further insights could be gleaned from management's discussion of their initiatives.
The new price target of $46 represents a slight increase from the previous target but still aligns with Piper Sandler's Neutral stance on the stock. This suggests that while there may be positive developments in Cracker Barrel's performance, the investment firm remains cautious in its outlook for the company's stock.
Cracker Barrel's latest financial updates and Piper Sandler's subsequent model revisions highlight the dynamic nature of stock evaluations, which must account for a variety of factors including sales performance, cost management, and broader strategic initiatives. The investment community will likely watch for further cues from Cracker Barrel's management in the upcoming conference call to assess the company's direction and potential impact on its stock value.
In other recent news, Cracker Barrel reported strong first-quarter results, surpassing sales, adjusted EBITDA, and adjusted EPS expectations. Truist Securities and BofA Securities responded to the results by adjusting their price targets on Cracker Barrel.
Despite these positive results, the company faced criticism from major shareholder Biglari Capital Corp., which called for a halt to new store openings and a focus on improving store-level economics. The company's board, however, urged shareholders to support its recommended slate of nominees and reject Biglari's proposals at the upcoming Annual Meeting of Shareholders.
In the fiscal 2024 fourth-quarter earnings report, Cracker Barrel revealed a total revenue of $894.4 million, a 6.9% increase from the previous year, yet the adjusted EBITDA decreased to $57.4 million.
Looking ahead, the company's fiscal 2025 plans include 25 to 30 store remodels and the opening of new Cracker Barrel and Maple Street locations, projecting a revenue of $3.4 billion to $3.5 billion. These are the recent developments for the company.
InvestingPro Insights
To complement Piper Sandler's analysis, InvestingPro data offers additional context on Cracker Barrel's financial position. The company's market capitalization stands at $1.08 billion, with a P/E ratio of 26.6, indicating that investors are paying a premium for the company's earnings. This aligns with Piper Sandler's cautious Neutral rating.
InvestingPro Tips highlight that Cracker Barrel has maintained dividend payments for 43 consecutive years, which may appeal to income-focused investors despite the recent dividend growth decline of 80.77%. This long-standing dividend history could provide some stability to the stock's value, even as the company navigates its strategic transformation.
Another relevant InvestingPro Tip notes that Cracker Barrel has shown a strong return over the last three months, with data confirming a 20.92% price total return in that period. This recent performance might explain the slight increase in Piper Sandler's price target, although it's worth noting that the year-to-date return remains negative at -33.44%.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide further insights into Cracker Barrel's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.