Stock market today: S&P 500 drops for fifth day as focus shifts to Powell’s speech
Investing.com - Loop Capital downgraded Shake Shack (NYSE:SHAK) from Buy to Hold on Tuesday, while maintaining its price target of $127.00. The fast-casual restaurant chain, currently valued at $5.65 billion, is trading near its 52-week high of $142.85, according to InvestingPro data.
The downgrade follows a significant rally in Shake Shack shares, which have surged approximately 60% in just the last couple of months since Loop Capital’s previous upgrade on April 1, 2025. This impressive performance aligns with InvestingPro data showing a 62% return over the past year and strong momentum scores.
Loop Capital analyst Alton Stump noted that Shake Shack shares recently surpassed the firm’s price target, prompting the rating change despite maintaining a positive outlook on the company’s fundamentals.
The $127 price target represents approximately 25 times Loop Capital’s 2025 EV/EBITDA estimate for the fast-casual restaurant chain.
Loop Capital indicated it would consider a more constructive stance on Shake Shack shares in the event of a "material pullback," but currently believes the stock’s valuation "accurately reflects the company’s attractive fundamentals."
In other recent news, Shake Shack has been the focus of several analyst updates. Wells Fargo (NYSE:WFC) raised its price target for Shake Shack to $115, noting that the company has consistently met or exceeded revenue expectations since the second quarter of 2023, thanks to cost-saving initiatives. However, they suggest future savings may be more challenging to achieve. Meanwhile, Truist Securities increased its price target to $150, citing "easing macro concerns" as a positive factor for the company’s performance, despite a slight miss in second-quarter store openings.
On the other hand, BTIG downgraded Shake Shack from Buy to Neutral due to concerns about guest frequency, although they acknowledge potential for margin expansion. TD Cowen also downgraded the stock from Buy to Hold, maintaining a price target of $105, due to Shake Shack’s high valuation and competitive challenges in the burger category. KeyBanc initiated coverage with a Sector Weight rating, recognizing Shake Shack’s growth potential but noting struggles with traffic growth amidst rapid expansion.
Additionally, Shake Shack has entered a licensing agreement with PENN to open approximately ten units in casinos, aiming to enhance its pipeline and profitability. The company’s strategies, including increased advertising and menu innovation, reflect an effort to adapt to changing consumer preferences and expand market presence. These developments indicate a mixed outlook for Shake Shack, with analysts expressing both optimism and caution regarding its future growth and profitability.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.