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Analysts Favor ‘Hold’ Recommendations for Shake Shack

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Dec. 4 2020, Updated 10:53 a.m. ET

Target price

On April 5, 2017, Shake Shack (SHAK) was trading at $32.45 per share. On an average, analyst expect SHAK’s stock price to reach $37.90 in the next 12 months, which represents a return potential of 16.8%.

The lower-than-expected 4Q16 same-store sales growth and fear of cannibalization led analysts to lower the company’s price target from $39.50 before the announcement of its 4Q16 earnings.

On April 5, 2017, Karen Holthouse of Goldman Sachs lowered her price target to $30 from her earlier estimate of $34 for SHAK. She also reaffirmed her “sell” rating. Two weeks earlier, on March 20, Nick Setyan of Wedbush had upgraded the stock from “underperform” to “neutral,” and he had raised the target price from $30 to $33.

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SHAK’s stock price moves in tandem with analysts’ recommendations. When an analyst raises his or her price target for the next 12 months, the stock price of the company could also rise, and vice versa. However, one should remember that a target price greater than the stock price does not mean an automatic “buy.” Before investing, you should carefully analyze the various metrics for a particular company.

The 12-month targets for SHAK’s peers are as follows:

  • Panera Bread (PNRA): $293.56, a fall of 6.2% from its current stock price
  • Chipotle Mexican Grill (CMG): $407.69, a fall of ~$10.0% from its current stock price

Analyst recommendations

Shake Shack (SHAK) is followed by 11 analysts. Of these analysts, 27.3% recommend a “buy,” 54.5% recommend a “hold,” and 18.2% recommend a “sell.” On March 6, 2017, Buckingham Research downgraded the stock from “buy” to “neutral.”

Next, we’ll look at Shake Shack’s performance in 2017.

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