Alton Stump, Loop Capital analyst, says Shake Shack’s (NYSE: SHAK), could be a safe place to go amid concerns about Trump tariffs and a possible recession in 2025.
Stump upgraded this morning the food company to “buy”. It said its shares could reach $127 by the year’s end, which would indicate a potential upside of 45% over current levels.
Loop’s bullish note about SHAK comes just hours before Trump’s “Liberation Day”, where he is expected to implement new duties on several countries.
Shake Shack continues reporting solid comparable sales
Shake Shack’s stock has fallen more than 30% amid the broader market decline in 2025. In his research note published on Tuesday, Stump called this a great opportunity to purchase a quality brand at a deep discount.
The Loop Capital analyst has a bullish outlook on SHAK, as its same-stores sales continue to exceed expectations quarter after quarter.
The New York-based fast-casual restaurant chain has also been extremely successful with its limited time offerings, including the launch during the pandemic of black truffle hamburgers.
Shake Shack, however, is not a dividend-paying stock. This means that it remains unattractive to those who are interested in establishing an additional passive income source ahead of a possible recession in the second half of 2025.
Digital sales can unlock SHAK’s share price
Loop Capital is also positive about SHAK because of its digital sales strength and its labour productivity, which it believes will help the company achieve comparable sales that are 3% higher than its management’s expectations.
“We believe that there is potential for a 10%+ increase in management’s guidance of adjusted EBITDA between $200 and $210 million by 2025 if comparable sales continue to exceed expectations.”
In February, Shake Shack announced its financial results for fourth quarter which exceeded Street estimates.
The burger chain made 26 cents per share on revenue of $329 million during its fourth fiscal quarter.
Analysts, on the other hand, were at 24 cents a share and $328 millions, respectively.
Shake Shack stocks are protected from Trump tariffs
The investment firm also recommends that investors take advantage of the Shake Shack stock’s year-to date decline, as it is minimally exposed to Trump’s tariffs and any trade wars that may follow.
All of SHAK’s ingredients are sourced from the United States.
The New York-listed company expects its total commodity basket to “be up low single digits by 2025”. This, along with manageable labor inflation, can be offset through modestly higher menu prices, Stump said in his research note.
Loop Capital is not the only one who agrees with Wall Street on Shake Shack.
The consensus rating for the food stock is currently “overweight”, with a median target of $130. This indicates a potential gain of nearly 50%.
This post This food supply is a safe haven before Trump’s Liberation Day first appeared on The ICD
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