Jefferies initiated coverage of Jersey Mike’s Subs (NYSE: JMKE) with a buy rating and a $29 price target, citing the sandwich chain’s asset-light growth model and expanding digital capabilities as key differentiators.
The stock last traded at $23.86, representing approximately 22% upside to Jefferies’ target. The initiation follows the company’s IPO in September, where shares debuted at $21, below the $23 midpoint of the anticipated range, and fell about 3% on the first day. Jersey Mike’s raised roughly $1 billion through the sale of 43.5 million shares, with demand reportedly exceeding supply by more than 10 times.
Analysts at JPMorgan and Morgan Stanley also initiated coverage with overweight ratings, assigning price targets of $26 and $29, respectively. The franchise, which operates more than 7,500 units across the U.S., has a gross profit margin of 66% and generated $742 million in franchisee revenue, according to InvestingPro data.
Jefferies highlighted the company’s low-single-digit growth targets for same-store sales and average unit volume, alongside a domestic expansion goal of more than 7,500 units. The firm emphasized Jersey Mike’s strategy to shift advertising spending toward social media and digital loyalty programs to boost guest frequency and broaden its customer base. Menu pricing growth is projected at 1% to 2%.
