UBS initiated coverage of Jersey Mike’s Subs (NYSE: JMKE) with a buy recommendation and a price target of $28, implying approximately 17% upside from the current trading price of $23.86.
The Swiss bank cited expectations for 10% annual revenue growth over the next three years, driven by an average 2.5% increase in same-store sales and an 8.5% to 9% compound annual growth rate in unit expansion. UBS also projected EBITDA to grow at a 14% compound annual rate during the same period, supported by a trailing twelve-month EBITDA of $240 million and revenue of $742 million.
Jersey Mike’s, which went public in 2024 raising $301 million in net proceeds primarily for debt reduction, has delivered 20 consecutive years of positive same-store sales growth. The company’s store count has expanded at a 12% compound annual rate over the past five years, with UBS noting its total addressable market remains roughly 4.5 times larger than its current footprint.
UBS highlighted menu innovation, marketing initiatives, digital channels, and delivery expansion as key strategic growth drivers. The bank’s valuation framework is based on 24 times enterprise value to estimated 2027 EBITDA, aligning with RBC Capital’s parallel assessment.
Consensus among sell-side analysts remains broadly constructive. RBC Capital and Jefferies both assigned buy ratings with $28 and $29 price targets, respectively, while Stifel and JPMorgan set targets of $27 and $26 with buy and overweight recommendations. Bernstein SocGen Group maintained a market perform rating with a $26 price target.
