Shake Shack’s Inc.’s stock shot up 6.3% in morning trade Tuesday, after the burger chain was upgraded by William Blair analyst Sharon Zackfia, who suggested the stock has now fallen far enough to make it attractive to investors. The stock’s closing price of $31.92 last Wednesday was about one-third record close of $92.86 reached May 21. She believes last week’s introduction of the Chick’n Shack sandwich is a potential “positive wildcard” to sales, as she believes it could boost traffic, margins and customer frequency. “While still the richest valuation in restaurants, Shake Shack’s premium has narrowed substantially versus its peer group, and we now see the opportunity for strong earnings growth with likely upside to more than offset any further potential valuation compression,” Zackfia wrote in a note to clients. Of the nine analysts submitting their Shake Shack ratings to a FactSet survey, Zackfia is now the only one with a bullish rating. The stock, which was still trading 62% above its initial public offering price of $21–it went public on Jan. 30, 2015–has tumbled 23% over the past three months, while the S&P 500 has lost 7%.
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