Analyst Peter Saleh of BTIG maintained a Buy rating on Shake Shack (SHAK – Research Report), with a price target of $140.00.
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Peter Saleh’s rating is based on several positive developments and strategic directions that Shake Shack is undertaking. The company’s first quarter sales surpassed expectations, despite challenges like adverse weather conditions and California wildfires. This demonstrates Shake Shack’s resilience and ability to perform better than the industry average during tough times. The company’s focus on advertising, particularly through the ‘Worth It’ campaign, is aimed at increasing brand visibility, with plans to maintain this investment in the coming year.
Additionally, Shake Shack is benefiting from self-help initiatives such as the implementation of a labor scheduling tool, which has yielded significant cost savings. This tool is expected to further improve restaurant margins throughout the year. While there are pricing adjustments, the potential for continued supply chain efforts and advertising strategies are seen as supportive for margin growth. Overall, these factors contribute to a positive outlook, justifying the Buy rating and a price target of $140.
In another report released yesterday, TD Cowen also maintained a Buy rating on the stock with a $140.00 price target.
SHAK’s price has also changed moderately for the past six months – from $101.280 to $123.610, which is a 22.05% increase.