On Monday, Oppenheimer has increased the price target for Shake Shack (NYSE: NYSE:SHAK) shares to $135 from the previous target of $122 while maintaining an Outperform rating. The firm's analysis suggests that the fast-casual restaurant chain still presents an attractive valuation when compared to its growth-focused industry peers.
This assessment comes even after Shake Shack's stock surged by 97% over the past 12 months, outperforming the S&P 500's 39% gain in the same period.
The bullish stance on Shake Shack is driven by expectations of positive earnings revisions in the future. Oppenheimer's evaluation points to the potential for new management to make a significant financial impact by 2025 through strategic initiatives aimed at improving sales, margins, and EBITDA. These initiatives are expected to deliver results that surpass the more conservative projections currently held by the market.
With Shake Shack's third-quarter results for 2024 expected to be announced on October 30, Oppenheimer's research leans towards predicting a stronger performance than what is generally anticipated by the Street. This has led to an upward revision of estimates extending through the year 2025.
The firm's confidence in Shake Shack is rooted in the belief that the company is well-positioned for upside potential. The revised price target of $135 reflects this optimism and the anticipation that Shake Shack will continue to perform strongly in the near future.
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