Jersey Mike’s Subs is a one-of-a-kind restaurant chain, and investors should jump on the stock following its recent initial public offering, according to Loop Capital. The investment bank initiated coverage of Jersey Mike’s with a buy rating, and a $40 price target on shares, suggesting almost 70% upside from Friday’s close.Jersey Mike’s debuted on the New York Stock Exchange in late July after pricing its initial public offering at $23 a share. The New Jersey-based chain is up 14% since then, through Friday. Loop Capital was a co-manager of the IPO. “The single greatest attribute to JMKE’s success was and remains the company’s capability to slice meats made to order in full view of each customer,” analyst Alton Stump said Monday in a note to clients. “No other chain does this on anything close to a regional, let alone national level, due primarily to the high level of difficulty faced with running the customer line efficiently while slicing to order especially during peak hours.” JMKE ALL mountain Shares of Jersey Mike’s Subs are up nearly 14% since a July IPO The sandwich chain has posted average annual comparable sales growth of 6% over the past 20 years, more recently accelerating to a compound annual growth rate of roughly 8.5% from 2020 to 2025, according to Loop Capital. That growth is likely to build as Jersey Mike’s embraces more digital marketing initiatives, with the company already planning to allocate 20% of advertising dollars to digital channels over the next 12 to 18 months, Stump said. “Looking ahead, our franchisee contacts are confident that JMKE’s comp growth profile will continue to benefit in coming quarters and years from simply having a digital marketing strategy in place, which was not the case prior to earlier this year,” the analyst wrote.
