Analyst Brian Bittner of Oppenheimer posted a bullish note on Jack in the Box Inc. (NASDAQ:JACK) following fiscal third quarter results that fared far more promising than buy-side’s potential worst nightmare.

In lieu of unanticipated headwinds only rearing this year and not the next, the analyst notes that the fast food chain still yielded $0.99 in adjusted EPS, compared to sell-side expectations calling for $1.05. Additionally, Bittner’s vote of confidence is a structural one, as he ventures a prospective sale of Qdoba could be a real game changer for the company.

The analyst writes: “SSS (same store sales) were better than buy-side feared, and excluding some one-time costs, 3Q17 EPS actually beat. Core earnings guidance barely budged despite expectations for much worse. Quarter’s weak spot was a store-level margin miss, a dynamic we are less concerned with given our structural thesis that Qdoba will be sold and JITB will quickly go to a 95%-franchised model. This thesis is our blueprint for JACK’s upside as significant FCF/sh accretion is unlocked, which would lift shares, based on our work. ’17 EPS tweaks up a penny and our near Street-low ’18 ($4.80) remains unchanged with upside bias.”

Looking ahead, management slightly lowered EPS 2017 guidance from $4.10-4.30 to $4.00-4.15, more or less in-line with the Street’s estimate of $4.17. Worthy of note, the analyst calculates this would signify the Jack team is looking for a range between $0.85 and $1.00 for its fourth-quarter EPS against the Street’s $0.96. Furthermore, the analyst underscores this outlook factors in Jack’s non-recurring $0.10 cost headwind from its fiscal third quarter, which truly means “core guidance actually barely budged.” Another peg in Bittner’s bullish case for Jack lies in “healthier” restaurant margins for the fiscal fourth quarter, assuming 18 to 18.5%. In reaction, the analyst takes his fiscal 2017 EPS forecast from $4.07 to $4.06.

The analyst opines, “We believe off our near Street-low earnings estimates that proforma JITB could generate $7+ FCF/sh if Qdoba was sold. This suggests an equity value of $111-126 per share based on our work with upside beyond this range if SSS turn nicely positive in 2018.”

Bittner reiterates an Outperform on JACK, with a price target of $125.00 representing a 31% rise over current trading levels. (To watch Bittner’s performance, click here)

TipRanks analytics demonstrate JACK as a Buy. Out of 12 analysts polled by TipRanks in the last 3 months, 8 are bullish, while 4 remain sidelined on Apple stock. With a potential upside of  22%, the stock’s consensus target price stands at $116.00.