Buy Shake Shack (SHAK) on Weakness Following Results - Buckingham Research
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Buckingham Research analyst John Zolidis said he would be a buyer of Shake Shack (NYSE: SHAK) amid weakness following its beat-and-raise quarter. The firm maintained its Buy rating and price target of $45.00. Shares of SHAK are currently down 7.5%.
"We would use any weakness following 2QFY16 results as an opportunity to buy one of the best LT growth stories in the sector," Zolidis said. "SHAK beat our revenue and EPS estimates for the quarter and raised its outlook. However, we understand that the shares will react negatively to comps slowing to MSD from LDD, especially in light of their recent appreciation. We believe that investors should focus on the LT unit growth opportunity for one of the highest ROIC concepts in the sector. New units continue to track at ~$3.6M+, above the company’s $3.0M LT model and the outlook for cash flow and earnings from this build-out remains very attractive, in our view. We see 40% upside/52% downside in our best/worst case scenarios."
Shares of Shake Shack closed at $40.87 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Hot Comments
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