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Investing.com - Raymond James has reiterated its Strong Buy rating and $160.00 price target on Shake Shack (NYSE:SHAK), citing a compelling entry point following the post-second quarter pullback in shares. According to InvestingPro data, the stock currently trades at $99.01, with analyst targets ranging from $110 to $162, suggesting significant upside potential despite recent volatility.
The firm hosted investor meetings earlier this week with Shake Shack CEO Rob Lynch and CFO Katie Fogertey at the company’s new unit and support center in Atlanta’s Battery mixed-use development near Truist Park.
Raymond James believes Shake Shack has company-specific comp drivers that can sustain solidly positive comparable sales, along with further margin upside driven by new processes, equipment, and increased accountability across the organization.
The firm also highlighted Shake Shack’s accelerating, high-ROI unit growth, noting the company currently has about 360 U.S. locations compared to a total addressable market of approximately 1,500, plus international licensing opportunities. Mid-teens percentage annual unit growth appears likely over the next few years.
Raymond James considers Shake Shack’s valuation attractive, with an EV/EBITDA in the upper teens, which is at the low end of its historical range of 18-30x, and the stock trading at a significant discount to the firm’s discounted cash flow fair value estimate of $160.
In other recent news, Shake Shack reported its financial results for the second quarter of 2025, surpassing earnings expectations with an EPS of $0.44, compared to a forecast of $0.37. Revenue also exceeded projections, reaching $356.5 million against an anticipated $353.58 million. Despite these strong figures, the market reacted negatively. The company has announced plans to expand into Vietnam, aiming to open 15 locations by 2035 in partnership with Maxim’s Caterers Limited, with the first location set for 2026. Analysts have responded to these developments with mixed ratings. Stifel raised its price target to $110, citing strong margins while maintaining a Hold rating. Truist Securities increased its target to $162, maintaining a Buy rating and highlighting margin strength. TD Cowen also adjusted its target to $110, describing the company’s recent performance as encouraging despite a challenging environment.
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