The shares of Shake Shack Inc (NYSE: SHAK) are up 1.5% at $54.72 this morning, after the popular fast-food chain earned an upgrade from Wedbush to “outperform” from “neutral,” alongside a price-target hike to $77 from $53. The firm cited the company’s quick addition of order-ahead pickup lanes and the implementation of drive-thru service in the next year, which will attract new customers and lead to stronger sales than pre-pandemic levels.
On the charts, the equity has been struggling to recover from its mid-March lows near the $30 level. And though the security rallied to the $63 mark in early June, it has substantially cooled off since. Shares have been trading sideways for most of the last two months, with overhead pressure at the $56 level and the 200-day moving average keeping a tight lid on the stock. Year-over-year, SHAK sports a 44% deficit.
Analysts were mostly hesitant toward the security coming into today, with 13 of the 15 in coverage carrying a tepid “hold” or worse rating, and only two sporting a “strong buy.” Meanwhile, the 12-month consensus price target of $53.46 is a 0.8% discount to its current perch.
A short squeeze could fuel additional tailwinds. Short interest is down 10.4% in the last two reporting periods, and the 8.26 million shares sold short make up roughly 28% of Shake Shacks stock’s available float, or more than a week’s worth of pent-up buying power.Also worth noting is the security’s Schaeffer’s Volatility Scorecard (SVS), which sits high at 95 out of 100. In other words, this shows that SHAK has tended to exceed option traders’ volatility expectations during the past year — a boon for options buyers.
FULL STORY: Schaeffersresearch