Shake Shack (SHAK): Reiterating Buy But Cutting PT - Buckingham
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Buckingham Research analyst, John Zolidis, reiterated his Buy rating on shares of Shake Shack (NYSE: SHAK) but cut his price target to $40 from $45.
SHAK is one of the analyst's favorite early stage growth companies combining a long runway for growth (~60 company-operated locations going to 450) with some of the best unit level economics in the industry (the analyst estimates the average Shack’s annual ROIC at ~36%).
The analyst believes SHAK’s exceptional returns are a function of strong AUVs in marquee locations reflecting the good value product offering, attractive store environment and strong brand.
The analyst's $40 PT is based on 21x (28x prior) FY'18 EV/EBITDA (representing a 30% discount to the stock's historical average since coming public in Jan. 2015).
Shares of Shake Shack closed at $32.83 yesterday.
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