TD Cowen Downgrades Shake Shack (SHAK) to Hold, Maintains $105 PT

On Monday, TD Cowen downgraded Shake Shack Inc. (NYSE:SHAK) from Buy to Hold, while maintaining its previous price target of $105. The firm stated that the current share price is trading above its 3-year average, and the challenging environment for restaurant spending will likely limit further multiple expansion. This is particularly true in the competitive burger category, where Shake Shack lacks a dominant position.

A cook in a busy kitchen preparing a delicious cooking of burgers and fries.

TD Cowen believes that Shake Shack’s margin improvement story has largely played out, which reduces the potential for significant future positive revisions to adjusted EBITDA. The rating downgrade comes after Shake Shack reported its Q1 2025 results on May 1 and highlighted a 10.5% year-over-year increase in total revenue to $320.9 million with system-wide sales of $489.4 million.

Shake Shack opened 11 new Shacks system-wide in the quarter and plans to open 45 to 50 company-operated locations in 2025. Negative points from Q1 included the traffic decline, macroeconomic challenges like high beef costs and wage inflation, and a roughly 1% decline in same-shack sales in April. Shake Shack Inc.’s (NYSE:SHAK) owns, operates, and licenses Shake Shack restaurants (also just called Shacks) in the US and internationally.

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Disclosure: None. This article is originally published at Insider Monkey.