Citigroup downgrades Jack In The Box (JBX ) to sell from hold.
Analyst Mark Kalinowski says Jack in the Box shares have appreciated over 70% in the last year and are currently trading above his $34 target near $36 per share, for a modest negative estimated total return.
In addition, he cites concerns including tough year-over-year comparable sales in the first-half of 2005, an outlook for increasing competition from McDonald's, Wendy's and Carl's, and the company's valuation when adjusting for the elimination of sale of units to franchisees.
Kalinowski cuts Jack in the Box's $2.44 fiscal 2005 (ending September) earnings per share estimate to $2.34 and $2.68 fiscal 2006 to $2.58. He keeps his $34 target. Meanwhile, he upgrades Wendy's to hold from sell.