Barclays cuts Shake Shack price target to $155, keeps overweight rating

On Thursday, Barclays (LON:BARC) analyst Jeffrey Bernstein revised the price target for Shake Shack stock (NYSE:SHAK) to $155 from the previous $159, while maintaining an Overweight rating on the company’s shares. Currently trading at $124.11 with a market capitalization of $5.3 billion, Shake Shack has attracted significant analyst attention. According to InvestingPro data, 8 analysts have recently revised their earnings estimates upward for the upcoming period. The adjustment follows the fast-casual restaurant chain’s fourth-quarter 2024 results and guidance for 2025 and the long term, which were presented at the ICR Conference.

Bernstein noted that Shake Shack’s first-quarter 2025 comparable sales (comps) remained resilient despite challenges posed by weather conditions. The company has demonstrated strong revenue growth, with InvestingPro data showing a 16.4% increase in the last twelve months to $1.21 billion. Furthermore, the company’s EBITDA guidance for 2025 was increased by approximately $5 million, building on its current EBITDA of $127.7 million. These factors were highlighted as positive developments for the company.

Looking at the long-term outlook, Bernstein found Shake Shack’s clarity on achieving a 22% or higher restaurant margin target to be very encouraging. He suggested that consistent margin expansion is likely for the company, which operates a chain of hamburger restaurants.

Bernstein’s comments reflect his analysis of Shake Shack’s recent performance and future potential. He indicated that while there was limited new information following the company’s latest financial disclosures, the positive aspects of the report and guidance provide a basis for the Overweight rating.

Shake Shack has been expanding its presence and refining its operational strategies, aiming to enhance profitability and shareholder value. The company’s focus on maintaining strong comparable sales and improving margins is central to its growth strategy. With the updated price target and sustained Overweight rating, Barclays signals confidence in Shake Shack’s ability to navigate market challenges and capitalize on growth opportunities.

In other recent news, Shake Shack Inc . reported its fourth-quarter 2024 earnings, exceeding analyst expectations. The company achieved an earnings per share of $0.26, surpassing the projected $0.16, and reported revenue of $328.7 million, which was higher than the expected $325.3 million. Shake Shack’s revenue grew by 14.8% year-over-year, driven by a 4.3% increase in same Shack sales and a significant expansion in restaurant-level margins. The company also reported a 24% increase in restaurant-level profit to $257.9 million and a 33% rise in adjusted EBITDA, reaching $175.6 million. Analysts have shown optimism following these results, with Oppenheimer and Company and Goldman Sachs analysts inquiring about future operational strategies and growth prospects during the earnings call. Shake Shack has announced plans to expand its U.S. footprint to 1,500 locations and aims to achieve adjusted EBITDA of $205 million to $215 million in 2025. The company continues to focus on strategic priorities, including operational improvements and culinary innovation, to drive future growth.

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