Shake Shack's stock shoots up to 2-year high after Morgan Stanley upgrade

Shares of Shake Shack Inc. shot up 8.5% toward a two-year high in midday trade Thursday, after the fast-casual burger chain was upgraded at Morgan Stanley, which cited consistent sales beats and valuation, which implies a balanced risk-versus-reward investment profile. Analyst John Glass raised his rating to equal weight and lifted his stock price target to $41. The three factors leading to the upgrade are the company's outperformance compared with expectations on unit growth, better disclosure on average unit volumes and margins by region and relative valuation, which could get a boost from potential tax reform benefits. Since the company reported third-quarter results after the Nov. 1 close, the stock has run up 22%, while the S&P 500 has gained 2.3%. Shake Shack has beat earnings per share and revenue expectations every quarter since it went public in January 2015. Earlier this week, the company disclosed that private equity firm Leonard Green & Partners acquired a 4.3 million share, or 11.7%, stake in the company.

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