Why These 2 Shake Shack Analysts Are Turning Bullish

As COVID-19 restrictions ease and restaurants begin to open, Shake Shack’s SHAK recovery is expected to accelerate through 2022, according to Goldman Sachs and Wedbush analysts.

The Shake Shack Analysts: Goldman Sachs analyst Jared Garber upgraded Shake Shack shares from Neutral to Buy and raised the price target from $107 to $109.

Wedbush analyst Nick Setyan upgraded Shake Shack from Neutral to Outperform and raised the price target from $114 to $118.

The Shake Shack Takeaways: A pullback in Shake Shack shares provides investors with an attractive price, and that the chain’s primarily urban store base has delayed its reopening recovery, Garber said in an upgrade note.

“The company’s small size and unique footprint drive a lag in the company’s recovery from COVID, making it one of the last re-opening plays in the space,” the analyst said.

“SHAK’s long-term story remains robust despite near-term challenges due to the brand’s primarily urban/tourism-based footprint.”

Wedbush's Setyan said the business is impaired in the near future, with a longer recovery period, but added that he expects recovery to accelerate through 2022. 

“We continue to view management’s multi-format approach to development post-COVID, including the first drive-through unit in 2021 and a heightened focus on Shack Tracks (both drive-up and walk-up windows), as expanding SHAK’s LT addressable market, particularly through an expansion of suburban opportunities,” he said.

SHAK Price Action: Shares of Shake Shack gained 4.47% Tuesday, closing at $88.38. 

Photo courtesy of Shake Shack.