Jefferies analyst Andy Barish downgraded the rating on Shake Shack to a Sell today, setting a price target of $120.00.
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Andy Barish has given his Sell rating due to a combination of factors related to Shake Shack’s current market position and future prospects. Despite recent menu innovations and improvements in same-store sales (SSS), Barish believes that the stock’s recent rally has already priced in much of the optimism surrounding these developments. The current valuation is seen as high, with the stock trading at a premium compared to its historical averages and its peers.
Barish is cautious about the sustainability of the recent positive trends, noting that while there is potential for growth, the expectations for continued acceleration in SSS and margin improvements are already reflected in the stock’s price. The projected growth targets for the next few years are ambitious, and without additional visibility into further sales and margin unlocks, the potential for significant upside seems limited. As a result, Barish views the risk/reward balance as skewed to the downside, leading to the Sell rating.
Based on the recent corporate insider activity of 37 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SHAK in relation to earlier this year.