With inflation still running at staggering levels worldwide, and particularly in the United States, most are watching their pennies extra close. The last thing anyone wants is to be considered “overpriced,” and sadly, that is just what Shake Shack (SHAK) is now. Shares plummeted over 8% as customers found out there was no deal to be had here.
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A report from Fox Business detailed that America’s most expensive fast-food restaurant is none other than Shake Shack. On average, Shake Shack has the “most overpriced menu,” the report noted, followed closely by Five Guys and the Sugar Factory. Shake Shack helped secure its status as priciest fast food chain back in March, when it hiked prices by 3%.
While Shake Shack was hardly alone in raising prices—McDonald’s (MCD) recently did so as well—they have been working to head off customer complains in that regard. McDonald’s, for example, came out noting that “historic rises in supply chain costs, wages and other inflationary pressures” made price hikes necessary.
Rip-Off
A New York Post report, meanwhile, did Shake Shack few favors, as it revealed that the studies around the priciest fast food chains in the United States often came with the word “rip-off” attached. This suggests that customers are not pleased with the price hikes. They do not find these a necessary evil, but rather yet another “inflationary pressure” they must address themselves.
A report from Delish, though, gave Shake Shack some hope. In fact, Shake Shack came in as the second priciest burger in fast food with its Shackburger at $7.99. The Five Guys cheeseburger, meanwhile, topped the charts at $12.89.
Is Shake Shack Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SHAK stock based on seven Buys, 10 Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 81.47% rally in its share price over the past year, the average SHAK price target of $137.33 per share implies 13.93% upside potential.
