A weak third quarter for Shake Shack could prove to be a turning point for the company, according to investor firm BTIG. On Thursday evening, the company reported a loss per share of 5 cents, 1 cent better than expected, but its $194 million revenue came in $3.5 million short of estimates from analysts surveyed by Refinitiv. However, BTIG analyst Peter Saleh upgraded the stock, saying in a note to clients Friday that the company's results should improve from here. "We are upgrading shares of Shake Shack to Buy from Neutral despite the sales and margin miss in 3Q21, as we believe the company's fundamentals have bottomed with upside trajectory ahead," the note said. BTIG said Shake Shack should be able to raise menu prices to offset inflation, adding it should be a beneficiary of the final stages of the economic reopening. "We see increased tourism/mobility on the horizon as borders reopen for international travel in November, vaccines for children become available and return to work accelerates, all aiding Shack's urban store base," the note said. BTIG set a price target of $100 per share for Shake Shack, which is 28% above where the stock closed Thursday. Other market participants appeared to share BTIG's optimism about Shake Shack, as the stock surged 25.7% on Friday. —CNBC's Michael Bloom contributed to this report.
A person wears a face mask outside Shake Shack Innovation Kitchen in Greenwich Village as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on September 27, 2020 in New York City.
Noam Galai | Getty Images
A weak third quarter for Shake Shack could prove to be a turning point for the company, according to investor firm BTIG.