BofA update shows where active managers are putting money
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.
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