Jack in the Box shares rise on Stifel initiation

Shares of fast food company Jack in the Box Inc. rose Thursday after a Stifel Nicolaus analyst recommended investors buy the stock, saying the chain is likely to benefit from remodeling and refranchising campaigns and consumers' desire for cheaper food.

Analyst Steve West rated the stock at "Buy" and said in a note to investors that the company's attempts to create "a more inviting and modern" appearance and its kitchen upgrades are "a great use of free cash flow."

Jack in the Box has also been aggressively selling company-owned units to franchisers, he said. When a company is more heavily franchised, it typically shoulders a lighter burden of the operating costs since franchisees largely pay for food ingredients and other expenses.

West added that fast food companies will continue to outperform casual dining companies, which typically charge higher prices, as more consumers cut back on pricey meals to pay soaring gas prices.

Shares rose 33 cents, or 1.4 percent, to $24.13.