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On Tuesday, Loop Capital Markets raised its rating on Shake Shack (NYSE:SHAK) shares from Hold to Buy, setting a price target (PT) of $127. The upgrade is based on an approximately 25 times multiple of the firm’s 2025 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) estimate. According to InvestingPro data, SHAK currently trades at an EV/EBITDA multiple of 29.35x, with a market capitalization of $3.75 billion.
Loop Capital’s analyst cited the potential for over 10% upside to Shake Shack’s management guidance for adjusted EBITDA, which is projected to be between $200 million and $210 million for the year 2025. This optimism is contingent on the company’s comparable sales continuing to outperform expectations throughout the current year. InvestingPro analysis shows strong fundamentals, with revenue growing at 15.18% and a healthy current ratio of 1.97x, suggesting solid operational execution.
The analyst’s confidence in the stock has been bolstered by a significant pullback in Shake Shack’s share price, which has declined over 25% since Loop Capital’s focus report was published on January 30, 2025. This decline in share value is perceived as an attractive entry point for investors.
The focus report from January had outlined the firm’s analysis and expectations for Shake Shack’s financial performance. Despite the recent drop in share price, Loop Capital now sees a compelling opportunity for investment in the fast-casual restaurant chain.
Shake Shack has been in the spotlight as it navigates the competitive landscape of the restaurant industry. With this new upgrade from Loop Capital, the company may attract increased attention from investors seeking to capitalize on the potential growth outlined by the firm’s analysts.
In other recent news, Shake Shack has experienced several notable developments. Shake Shack’s stock received an upgrade from CFRA, moving from a Hold to a Buy rating, with a price target set at $134. This upgrade is based on the company’s earnings growth potential and plans to open 85 new restaurants in 2025. Similarly, op Capital analyst Alton Stump upgraded Shake Shack from Hold to Buy, setting a price target of $127, citing potential for the company’s adjusted EBITDA to surpass its 2025 guidance. Wells Fargo (NYSE:WFC) initiated coverage with an Equal Weight rating and a $95 price target, recognizing Shake Shack’s growth potential but noting challenges in the competitive market.
Truist Securities maintained a Buy rating with a $154 target, highlighting recent sales trends and strategic marketing efforts as growth drivers. Meanwhile, Stifel increased its price target from $110 to $120, maintaining a Hold rating, acknowledging positive sales momentum and strategic objectives for 2025. Shake Shack’s recent performance, including a 3.7% increase in comparable sales, has prompted an upward revision in its full-year EBITDA forecast by $5 million. Analysts continue to monitor Shake Shack’s strategic initiatives and market conditions, with varying degrees of optimism about the company’s future growth trajectory.
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