Shake Shack upgraded to Neutral but yanked from Best Ideas at Wedbush

|About: Shake Shack (SHAK)|By:, SA News Editor

Shake Shack (SHAK -0.3%) is upgraded to Neutral from Underperform with a $33 price target, raised from $30, at Wedbush, based on on valuation and lowered expectations.

While Wedbush believes SHAK’s valuation now is more in line with the company’s long-term opportunity, the firm removes the stock from its Best Ideas list, as it no longer sees the current $1.1B enterprise value as unjustifiable due to lower valuation that reflected weaker terminal sales volume expectations, as well as higher annual unit growth rate than earlier estimated.

In addition, the firm notes that same-store sales headwinds were now well understood, saying, “Given very strong new unit openings, we do not expect SHAK to benefit from a multi-year maturation cycle.”