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Investing.com - Jefferies has upgraded Shake Shack (NYSE:SHAK) from Underperform to Hold while reducing its price target to $95.00 from $110.00. The stock, currently trading at $86.76, has declined over 33% year-to-date, according to InvestingPro data.
The research firm cited the recent pullback in Shake Shack shares, noting that the current price now appropriately reflects more modest same-store sales and traffic expectations through 2025. The company, with a market capitalization of $3.7 billion, trades at a P/E ratio of 189x and an EV/EBITDA multiple of 26x.
Jefferies indicated that investor expectations have been tempered as recent data points have not shown a meaningful improvement through late third quarter, despite Shake Shack’s robust pipeline of innovation and marketing initiatives. InvestingPro analysis shows the company maintains strong financial health with liquid assets exceeding short-term obligations and moderate debt levels.
The firm acknowledged ongoing promotional pressures in the quick-service restaurant sector but suggested that Shake Shack could begin to show consistency in low-single-digit percentage same-store sales growth with relatively flat traffic.
The new $95 price target reflects a multiple of 19 times Jefferies’ 2026 EV/EBITDA estimate for the burger chain, a valuation adjustment from the previous target that implied over 20 times EV/EBITDA.
In other recent news, Shake Shack has announced its financial and strategic developments. The company is planning to open its first location in Hawaii on Oahu by 2027, partnering with Union MAK Corporation. Additionally, Shake Shack aims to establish 15 new locations in Vietnam by 2035, expanding its presence in Asia through its collaboration with Maxim’s Caterers Limited. On the financial side, Truist Securities has lowered its price target for Shake Shack to $156 due to anticipated beef cost spikes affecting margins, though they maintain a Buy rating. Meanwhile, Raymond James has reiterated a Strong Buy rating with a $160 price target, citing a compelling entry point for investors. In terms of leadership changes, Shake Shack appointed Michael Fanuele as Chief Brand Officer, who will manage advertising and media strategies. These developments reflect Shake Shack’s continued global expansion and strategic adjustments.
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