Loop Capital analyst Alton Stump says Shake Shack (NYSE: SHAK) could prove to be a safe haven amidst concerns of Trump tariffs and a potential recession in 2025.
Stump upgraded the food company this morning to “buy” and said its shares could hit $127 by the end of this year, which indicates potential upside of about 45% from current levels.
Loop’s bullish note on SHAK arrives only hours before Trump’s “Liberation Day”, when he’s expected to implement new tariffs on several countries.
Shake Shack continues to report solid comparable sales
Shake Shack has tanked more than 30% amidst the broader market sell-off in 2025, which Stump dubbed an opportunity to buy a quality name at a deep discount in his research note on Tuesday.
The Loop Capital analyst is bullish on SHAK as its same-store sales continue to beat expectations quarter after quarter.
Additionally, the New York-based chain of fast-casual restaurants has been immensely successful with its limited-time offerings, including the launch of black truffle burgers during the pandemic.
However, Shake Shack is not a dividend stock, which means it remains unattractive for those interested in setting up an additional source of passive income ahead of a potential recession in the back half of 2025.
Digital sales could unlock upside in SHAK share price
Loop Capital is positive on SHAK also for the strength of its digital sales and labour productivity that it expects will help the company’s comparable sales come in some 3% above its management’s expectations.
We believe there’s potential for 10%+ upside to management’s guidance for adjusted EBITDA of $200 to $210 million in 2025 in the event comparable sales continue to beat expectations.”
In February, Shake Shack reported its financial results for the fourth quarter that topped Street estimates.
The burger chain earned 26 cents a share on $329 million in revenue in its fiscal Q4.
Analysts, in comparison, were at 24 cents per share and $328 million, respectively.
Shake Shack stock is insulated from Trump tariffs
Finally, the investment firm recommends capitalising on the Shake Shack stock’s year-to-date decline as it’s minimally exposed to Trump tariffs and a trade war that may follow.
That’s because SHAK sources all of its ingredients from within the United States.
The New York-listed firm expects its overall commodity basket “to be up low single digits in 2025, which, along with manageable labour inflation, we’re confident it can offset via modestly higher menu pricing,” Stump added in his research note.
The rest of Wall Street seems to agree with Loop Capital on Shake Shack shares as well.
The consensus rating on the food stock currently sits at “overweight” with a mean target of $130, which indicates a potential upside of nearly 50% from here.
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