Bulls have been getting even more bullish lately.
With the market hitting record high after record high, analysts have been having a hard time keeping up with the crazy rallies in some of the market’s biggest gainers. In order to keep up with the surge, some analysts have started slapping huge price targets on equities like Shake Shack, Tesla and Apple.
Shake Shack (SHAK)
Most recently on Wednesday, Goldman Sachs put a $115, 12-month price target on Shake Shack. Analyst Katherine Fogertey’s price target represents a nearly 80% move higher from Tuesday’s closing price of $64.10 per share.
Shake Shack shares have been under serious pressure since November when the company reported sales that missed Wall Street estimates. The stock tanked more than 20% following the report. But Fogertey said in a note on Jan. 14 that two main reasons drove her to hike her price target to a Street high. First, management outlined plans for potential menu innovation. “[The] return of the Hot Chicken Sandwich, and new hot chicken nuggets, as well as vegetarian burgers [could help] to drive better than expected comps in 2020,” Fogertey wrote.
Second, Fogertey argued that management’s recent commentary at the ICR Conference regarding the company’s Grubhub migration process was positive. “[Management] indicated they completed the [point of sale] integration with GRUB yet only 40% of SHAKs have fully migrated to solely GRUB in POS,” she said.
Fogertey’s call sent Shake Shack stock soaring 9% Wednesday for its best day in 5 months. Nevertheless, shares are still down more than 33% from their all-time highs reached on Sept. 5, 2019.
Tesla shareholders have had a lot to celebrate over the past few months. After posting a surprise third-quarter profit on Oct. 23, 2019, the stock surged and crossed above $300 for the first time since Mar. 1, 2019. Shares have been on a tear ever since and are up a whopping 112%, as of Tuesday’s close.
Tesla’s massive rally has given analysts little time to adjust their ratings and price targets. Oppenheimer analyst Colin Rusch went big with his call on Jan. 13. He raised his 12- to18-month price target on Tesla stock by nearly 60% to $612 from $385 per share.
“While Tesla has stumbled through growing pains, we believe the company has reached critical scale sufficient to support sustainable positive [free cash flow],” Rusch said in his note. “We believe Tesla has key advantages in power train design, battery technology, ADAS fleet size, roadmap to energy independence offerings, and consumer enthusiasm that can translate into material operating leverage, share gains, and market disruption as renewables and autonomy trends accelerate.”
In addition, Ark Investment’s founder Cathie Wood boosted her five-year price target on Tesla stock to $6,000 from $4,000 per share. The reasoning for the bull case price target is not driven by the electric vehicle market share assumptions, but by the fact that Tesla will succeed in becoming an autonomous platform provider, according to the investment management firm. Wood’s bear case price target is $700 per share.
Tesla stock sits less than 2% from its all-time highs.
What a difference a year makes, at least for tech giant Apple.
At the start of 2019, investors were spooked after Apple CEO Tim Cook wrote a letter to shareholders slashing Apple’s fiscal 2019 first-quarter guidance. Cook outlined concerns over expectations for weaker-than-expected iPhone sales and a decelerating Chinese economy due, in part, to the ongoing trade war between the U.S. and China.
Well, Apple investors are sitting comfortably these days. Shares of the tech behemoth are near record highs and have rallied 109% over the past 12 months, while the broader market rose 29% in the same time period. Wall Street is extremely optimistic about Apple’s future as the tech world moves rapidly to adopt 5G technology. It is one of the reasons why D.A. Davidson analyst Tom Forte raised his price target by 25% to $375 per share from $300. Apple shares closed at $312.68 Tuesday.
“There is enough complexity and hype when it comes to 5G (the next-generation wireless network) that we believe Apple can exploit this multi-year opportunity and generate positive smartphone unit growth for, at least, its next two product launches – fall of 2020 and fall of 2021,” Forte said in a note.
Apple is the second most valuable company in the world with a market capitalization of $1.37 trillion.
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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