Fast food chain Shake Shack Inc (NYSE:SHAK) is down 4% to trade at $54.73 this morning, after a downgrade to "overweight" from "equal weight" at Morgan Stanley. The firm also cut its price target to $76 from $115, just one day after Shake Shack slashed both its second quarter and full-year outlook.
Several other analysts also chimed in with price-target cuts, including Wells Fargo to $60 from $80. Ahead of today, analysts had been mostly optimistic toward the burger name, with 17 of the 21 in coverage sporting a "buy" or "strong buy" recommendation.
SHAK earlier traded as low as $53.90, a new three-year low. The shares have backpedaled 32% in 2026, thanks in large part to a 28.3% post-earnings bear gap on May 7.
Options traders have been bullish toward SHAK as well. The equity's 50-day call/put volume ratio of 2.44 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 94th annual percentile, meaning should this bullish sentiment begin to unwind, it could trigger more headwinds for the shares.
Options are looking affordable for Shake Shack stock, per its Schaeffer's Volatility Index (SVI) of 51% that ranks in the 27th annual percentile. Plus, SHAK's Schaeffer's Volatility Scorecard (SVS) comes in at 95 out of 100. This suggests the equity has consistently realized higher volatility than its options have priced in.
