Shake Shack Will Have Trouble Delivering – Analyst

By Kim Khan

Investing.com – Shake Shack (NYSE:) stumbled ahead of its earnings report next week after an analyst downgrade over continued pessimism that its delivery plan is sound.

Shares fell 2% in afternoon trading.

SunTrust’s Robinson Humphrey cut the stock to hold from buy, with the price target edging down to $79 per share.

Last year, Shake Shack announced an exclusive delivery partnership with GrubHub (NYSE:), but execution has been spotty.

“Sales disruption from SHAK’s transition to a single delivery partner is difficult to judge, but our analysis suggests some risk of a deeper and longer impact to sales,” SunTrust analyst Jake Bartlett wrote.

The fast-food chain will likely see comparable sales decline 0.8% in 2020, rather than the 0.1% previously forecasted, Bartlett said.

Shake Shack reported earnings on Monday, with analysts predicting a quarterly of a penny per share on sales of about $153 million.

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