New York-based burger chain Shake Shack (SHAK) has announced that it will deepen its partnership with Maxim’s Caterers Limited and open 10 new Shacks in China by 2031. Shares of the company gained 1.5% in the extended trading session on Tuesday.
The company has targeted locations, including Sichuan, Chongqing, Yunnan, Hubei, Shaanxi, Anhui, Henan, and Guizhou. As per the new agreement, the development commitment in China has been raised to 79.
So far in 2021, restaurants have been opened in Macau and Shenzhen. The company plans to set foot in Hangzhou later this year. (See Shake Shack stock chart on TipRanks)
Chief global licensing officer of Shake Shack Michael Kark said, “China is incredibly fast-paced, dynamic and remains our fastest growing international market.”
Chairman and Managing Director of Maxim’s Caterers Limited Michael Wu said, “Maxim’s and Shake Shack adhere to a friendly and cooperative relationship and will continue to explore a more comprehensive expansion plan into 2031, bringing Chinese guests warm community gathering places with premium ingredients and enlightened hospitality.”
On June 16, Oppenheimer analyst Michael Tamas assigned a Buy rating and a price target of $124 to SHAK. This implies 28.7% upside potential from current levels.
Tamas said, “Shack Track features (including drive-thrus) represent exciting opportunities to elevate longer-term AUV’s and fuel the company’s accelerating unit growth plans into 2022 and beyond.”
Consensus among analysts is a Hold based on 4 Buys, 7 Holds, and 2 Sells. The average Shake Shack analyst price target stands at $103.45, which implies upside potential of 7.4% from current levels.
TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Shake Shack is currently Neutral, as the cumulative change in holdings across all 4 hedge funds that were active in the last quarter was a decrease of 210,900 shares.
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