Stifel says Shake Shack is trading at a discount that investors can’t ignore following an earnings-driven selloff. The investment firm upgraded the fast-casual chain to “Buy from Hold.” The price target was lowered from $105 to $85, but that still represents an upside of 23% from Thursday’s close. Shares plunged 28% on Thursday after the company said it broke even on a per-share basis in the first quarter. Analysts polled by FactSet expect earnings of 12 cents per share. Same-store sales, an important metric for restaurant chains, also fell just short of expectations in the quarter. “The market overreacted to disappointing first quarter results and weak sales in April,” analyst Chris O’Cull said in a note. “While restaurant margins have improved, we see an opportunity for significant EBIT margin expansion beyond our ~4% 2026 guidance, driven by significant G&A leverage (which management has promised) providing more robust support [free cash flow] Generation.” The results pushed the stock to its lowest level since early 2024. O’Cull added that at about 12.5 times expected EBITDA, the stock is the cheapest it has been since the Covid-19 pandemic. SHAK 1D Mountain Shares of Shake Shack fell 28% on Thursday following its first-quarter earnings report. O’Cull said the new menus and continued marketing investments should also drive more traffic to stores. Of the 30 analysts covering Shake Shack, 18 believe the stock is down nearly 15% year to date.
