What Are Analysts Recommending for Shake Shack?

As of April 29, 2016, Shake Shack (SHAK) was trading at $36.50. The share price may have already priced in the estimates that we’ve discussed in the earlier articles. In this article, we’ll look at analysts’ recommendations and estimated price targets over the next 12 months.

With growth in revenue and earnings per share, analysts are expecting the share price of Shake Shack (SHAK) to reach $40.40 in the next 12 months, which represents a return potential of 10.7% from the current $36.50.

On the higher side, Alton Stump of Longbow Research has estimated the share price could touch $46.00. On the lower side, John W. Ivankoe of J.P. Morgan forecasted that the price could reach $35.00. SHAK also forms 0.01% of the holdings of the Vanguard Russell 2000 ETF (VTWO).

The 12-month target for Shake Shack’s peers are as follows:

• Panera Bread (PNRA): $233.60 with a return potential of 8.9%
• Chipotle Mexican Grill (CMG):$455.90 with a return potential of 8.3%
• Jack in the Box (JACK): $81.20 with a return potential of 20.1%

According to a Bloomberg consensus, of the ten analysts surveyed, 20% have “buy” recommendations for Shake Shack (SHAK), 60% have “hold” recommendations, and 20% have “sell” recommendations. SHAK’s share prices move in tandem with analysts’ recommendations. As analysts raise their next-12-month target price, the price of the stock may also increase, and vice versa.

A share price that is lower than the target price doesn’t mean an automatic buy. Before investing, investors should carefully analyze the various metrics we’ve discussed in this series.