UBS raises Cracker Barrel stock price target due to improved sales trends

On Tuesday, UBS analysts increased the price target for Cracker Barrel stock (NASDAQ: NASDAQ:CBRL) to $60 from $48 while maintaining a Neutral rating. The change comes as analysts anticipate improved momentum moving into the company's fourth fiscal quarter. According to InvestingPro data, the stock has shown strong returns over the past three months, though it currently trades at a relatively high P/E ratio of 35.3x.

UBS analysts expect Cracker Barrel's third-quarter results, set to be announced on Thursday, to reflect challenges from weather and other industry headwinds. However, they believe the company is making progress in its strategic transformation aimed at enhancing relevancy, sales, and profitability. The company has maintained its dividend payments for 44 consecutive years, demonstrating long-term financial stability despite current challenges. Get deeper insights into Cracker Barrel's financial health with InvestingPro , which offers exclusive analysis and 8 additional key ProTips.

The analysts have projected a blended same-store sales growth of 0.5%, which is below the consensus estimate of 1.0%. They also forecast earnings per share of $0.22, compared to the consensus estimate of $0.27, and operating margins of 1.1%, slightly below the consensus of 1.2%.

In their assessment, UBS analysts noted that any updates to Cracker Barrel's fiscal year 2025 guidance, including revenue projections of $3.45-3.5 billion and adjusted EBITDA of $210-220 million, will be critical. They will also focus on sales trends through the fourth quarter to date and updates on strategic initiatives such as menu updates, marketing strategies, and remodels.

UBS analysts raised the price target based on improving industry valuations and sales trends, as well as early progress in the company's turnaround plans. However, they remain cautious, citing limited visibility into significant turnaround progress due to macroeconomic pressures.

In other recent news, Cracker Barrel Old Country Store reported its Q1 2025 earnings, surpassing expectations with an adjusted earnings per share (EPS) of $1.38 against a forecast of $0.99, and revenue of $949.4 million exceeding the anticipated $939.97 million. Truist Securities upgraded Cracker Barrel's stock from Hold to Buy, raising the price target to $55, citing the company's strong financial performance and ongoing turnaround efforts. On the other hand, BofA Securities reduced its price target to $48 while maintaining an Underperform rating, reflecting concerns over industry challenges despite Cracker Barrel's strong second-quarter performance. Citi maintained a Sell rating on Cracker Barrel, increasing the price target to $42, expressing skepticism about the stock's risk-reward balance due to financial pressures on consumers and increased capital expenditures. Benchmark analysts continue to hold a cautious Hold rating following meetings with Cracker Barrel's management, adjusting same-store sales estimates to reflect current consumer trends. These developments highlight Cracker Barrel's strategic transformation efforts amid a challenging market environment.

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