Baird initiated coverage on Jersey Mike’s Subs on Monday with an outperform rating and a $27 price target, citing the sandwich chain’s strong gross margins and premium valuation.
The brokerage highlighted a trailing twelve-month gross margin of 66% and an enterprise-value-to-EBITDA multiple of 31 times, positioning the stock above many peers. Consensus estimates compiled by Baird point to a $30 price target, implying a potential 26% upside from current levels.
Other analysts tracking the company following its initial public offering in 2022 have also weighed in. UBS maintained a buy rating with revenue growth projected at roughly 10% over the next three years and a compound annual EBITDA growth rate of 14%. RBC Capital assigned an outperform rating with a $28 target, while Stifel reiterated its buy rating with a $27 target.
Stifel noted the company raised $301 million in its IPO, primarily to reduce debt. Bernstein assigned a market-perform rating with a $26 target, while Jefferies maintained a buy rating with a $29 target. Jefferies also highlighted potential for expansion to more than 7,500 domestic units.
