S&P 500 falls on pressure from retail stocks, weak jobless claims
Investing.com - Truist Securities raised its price target on Shake Shack (NYSE:SHAK) to $160.00 from $150.00 on Wednesday, while maintaining a Buy rating on the fast-casual restaurant chain. According to InvestingPro data, the stock is currently trading near its 52-week high of $142.85, with a market capitalization of approximately $6 billion.
The firm expects Shake Shack to report second-quarter same-store sales growth of 2.5%, exceeding the consensus estimate of 1.5%, which could boost investor confidence in the company’s sales story.
Truist also anticipates solid third-quarter same-store sales guidance of approximately 3.5%, compared to consensus expectations of 2.0%, further supporting the bullish outlook.
Despite Shake Shack stock’s strong recent performance, up 7.2% year-to-date and 77% from its April 7 low, compared to the S&P’s gains of 5.8% and 23.0% respectively, Truist remains optimistic about the company’s long-term prospects for positive same-store sales, expanding margins, and strong unit growth.
The firm acknowledged that rising beef costs are expected to pressure cost of goods sold, but believes Shake Shack will reiterate its margin guidance, with sales momentum sustained by what Truist describes as a strong innovation pipeline.
In other recent news, Shake Shack has been the subject of several analyst reports and price target changes. Wells Fargo (NYSE:WFC) increased its price target for Shake Shack to $115, citing consistent revenue performance and potential future cost savings, while maintaining an Equal Weight rating. Meanwhile, Truist Securities raised its price target to $150, maintaining a Buy rating, despite Shake Shack missing its second-quarter guidance for new store openings. Truist noted limited risk to the company’s full-year development guidance, attributing the target increase to easing macroeconomic concerns. On the other hand, Loop Capital downgraded Shake Shack from Buy to Hold, as the stock surpassed its price target of $127, reflecting accurate valuation. BTIG also downgraded Shake Shack to Neutral, expressing concerns about guest frequency despite potential for margin expansion. KeyBanc initiated coverage with a Sector Weight rating, highlighting Shake Shack’s growth potential and challenges in traffic growth due to rapid expansion. These developments illustrate a mixed sentiment among analysts regarding Shake Shack’s current valuation and future growth prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.