The restaurant company's price target was reduced due to lower industry-wide multiples, but Jack in the Box remains one of Oppenheimer's top picks during 2016, the firm said.
"JACK is the poster child for a healthy story with strong execution that's become under-the-radar and out-of-favor," the firm said. "Despite a string of consistent beat-and-raises, JACK seems to have fallen into 'prove-it' story mode with investors, which enhances risk/reward even on in-line results."
Additionally, the company is unveiling a comparative-sales driving burger platform and its Qdoba restaurants have an innovative menu, the firm added.
Jack in the Box reports its 2016 first quarter results after the market close on Wednesday.
Jack in the Box stock is up by 2.31% to $72.86 in early-morning trading on Friday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rates this stock as a "hold" with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and weak operating cash flow.
You can view the full analysis from the report here: JACKJACK data by YCharts