Stifel raises Shake Shack stock price target to $110 on strong margins

Published 31/07/2025, 19:14
Stifel raises Shake Shack stock price target to $110 on strong margins

Investing.com - Stifel raised its price target on Shake Shack (NYSE:SHAK) to $110.00 from $97.00 on Thursday, while maintaining a Hold rating on the fast-casual restaurant chain. The new target sits within the broader analyst range of $97-$168 for the $5.25 billion market cap company, which according to InvestingPro analysis is currently trading above its Fair Value.

The price target increase follows Shake Shack’s second-quarter 2025 earnings report, which showed softer-than-expected comparable sales but delivered strong margin performance. The company reported EBITDA of $58.9 million, exceeding the Street consensus of $55.5 million. This performance contributes to the company’s impressive 14.07% revenue growth over the last twelve months, with a healthy gross profit margin of 38.8%.

Shake Shack’s sales trends improved each month throughout the second quarter and into July, with quarter-to-date comparable sales up 3.2%, including positive traffic. The company recently launched its first paid media campaign aimed at boosting brand awareness and customer engagement.

Stifel noted that management’s guidance could be conservative as it did not account for returns on the incremental marketing investment. The firm’s estimates are positioned around the high end of the company’s guidance range, anticipating positive impact from the new marketing spend.

Despite the price target increase, Stifel maintained its Hold rating, citing uncertainty about what level of marketing and promotional spending will be necessary to drive sustainable traffic growth at Shake Shack locations. The stock has shown significant momentum, delivering a 60.82% return over the past year, though InvestingPro data indicates relatively high valuation multiples across key metrics.

In other recent news, Shake Shack reported its financial results for the second quarter of 2025, exceeding earnings expectations with an earnings per share (EPS) of $0.44, surpassing the forecast of $0.37. Revenue also outperformed predictions, reaching $356.5 million compared to the anticipated $353.58 million. Despite these strong figures, the company’s same-store sales missed expectations, although it managed to beat adjusted EBITDA estimates, prompting an increase in its adjusted EBITDA guidance for the year. Analyst firms have responded to these developments with varied adjustments to their price targets. Truist Securities raised its price target to $162 while maintaining a Buy rating, citing margin strength. Meanwhile, TD Cowen increased its target to $110 from $105, keeping a Hold rating, and noted the encouraging second-quarter performance despite challenges in the fast-casual restaurant sector. These updates reflect ongoing investor interest and scrutiny in Shake Shack’s financial trajectory.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.