Shake Shack assumed with an Underweight at JPMorgan

JPMorgan analyst Rahul Krotthapalli assumed coverage of Shake Shack with an unchanged Underweight rating and $102 price target, down from $105. The firm sees challenges of achieving broad-market penetration for a “very high priced brand in an intensely competitive” quick service burger and chicken category. The challenge JPMorgan sees is how to balance the need for Shake Shack pricing to be closer to peers while respecting management’s focus on labor scheduling, supply chain, and eventual processes, including menu and store redesign, the analyst tells investors in a research note.