The Ratings Game: Shake Shack’s growth plan gets mixed response from analysts

Some analysts are cheering Shake Shack Inc.’s revised plan to increase the number of restaurant openings in the coming months. Others, after considering the downward shift in second-quarter same-store sales results, are expressing concern that results will suffer as Shake Shack’s footprint gets bigger.

“Given very strong new unit openings, we do not expect Shake Shack to benefit from a multi-year maturation cycle that serves as a tailwind for other growth restaurants,” Wedbush wrote in a note published Thursday that reiterates its underperform rating and $30 price target.

“We also believe that while driving upside today, the strength of Shake Shack’s current openings may result in a comp drag even entering the comp base in their 25th month versus 19th month for most peers.

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