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Investing.com - Stifel lowered its price target on Shake Shack (NYSE:SHAK) to $105.00 from $110.00 on Friday, while maintaining a Hold rating on the fast-casual restaurant chain. The current stock price of $96.01 sits below this target but above the InvestingPro Fair Value estimate, suggesting potential overvaluation despite analyst optimism.
The price target adjustment follows Shake Shack’s third-quarter results, which showed comparable sales growth of 4.9% and positive traffic for only the second time in the last ten quarters. The company also reported a 180 basis point expansion in restaurant-level margin during the period. This performance contributes to Shake Shack’s overall revenue growth of 13.13% over the last twelve months.
Despite the solid third-quarter performance, Shake Shack’s fourth quarter began with softer comparable sales growth of 1.3%. Management attributed this slowdown to macroeconomic pressures and a challenging comparison against a previous limited-time offer. This volatility aligns with the stock’s beta of 1.66, reflecting its price sensitivity to market movements.
The company has recently pivoted to highlight in-app value promotions, which has driven a positive inflection in traffic in recent weeks, according to Stifel. The research firm noted encouragement from Shake Shack’s paid advertising strategy and its ability to quickly adjust in a volatile consumer environment.
Shake Shack is set to potentially introduce what Stifel described as a likely "big" limited-time offer in early November, which has made the research firm "incrementally more constructive" on the comparable sales outlook. With a P/E ratio of 90.05 and YTD return of -29.6%, investors considering SHAK may benefit from the comprehensive analysis available in the InvestingPro Research Report, which provides deeper insights on this and 1,400+ other US equities.
In other recent news, Shake Shack reported its third-quarter earnings for 2025, surpassing analyst expectations with an earnings per share of $0.36, exceeding the forecast of $0.31. The company’s revenue also outperformed projections, reaching $367.4 million against the anticipated $363.89 million. These results highlight Shake Shack’s successful strategic initiatives, including value-focused offerings and increased marketing expenditures, which contributed to the positive performance. Additionally, Mizuho has maintained its Neutral rating on Shake Shack with a price target of $95. The firm noted the company’s third-quarter same-store sales growth, driven by value initiatives and higher paid media spending. Ongoing labor efficiencies have also been noted as a factor in improving unit-level margins. These developments reflect Shake Shack’s efforts to enhance its financial performance and operational efficiency.
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