Analysts Conflictied on These Services Names: Shake Shack (NYSE: SHAK), Hms Holdings Corp (NASDAQ: HMSY) and Viacom Inc. (NASDAQ: VIAB)

By Ryan Adsit

Analysts have been eager to weigh in on the Services sector with new ratings on Shake Shack (NYSE: SHAK), Hms Holdings Corp (NASDAQ: HMSY) and Viacom Inc. (NASDAQ: VIAB).

Shake Shack (NYSE: SHAK)

Jefferies analyst Andy Barish reiterated a Hold rating on Shake Shack (NYSE: SHAK) yesterday and set a price target of $38. The company’s shares closed yesterday at $33.26.

Barish commented:

“Solid 3Q EPS of $0.15, a penny above us/cons with slightly lower rest level margins of 28.8%, showed growth of 25% y-o-y. Nevertheless, with SSS at “just” 2.9% (on top of 17.1%) there is lessening likelihood of significant upside surprises from here with increasing labor/G&A investment. Guide for ’17 appears robust on top-line.”

According to TipRanks.com, Barish is a 4-star analyst with an average return of 6.0% and a 50.7% success rate. Barish covers the Services sector, focusing on stocks such as Popeyes Louisiana Kitchen, Buffalo Wild Wings, and Ruth’s Hospitality.

Shake Shack has an analyst consensus of Hold, with a price target consensus of $35.75.

Hms Holdings Corp (NASDAQ: HMSY)

Jefferies analyst David Windley reiterated a Hold rating on Hms Holdings Corp (NASDAQ: HMSY) yesterday and set a price target of $19. The company’s shares closed yesterday at $16.80.

Windley noted:

“HMSY’s Commercial plan contract traction was less evident in 3Q revenue. Low taxes drove all the 3Q EPS upside plus a penny. Restoration of some RAC revenue offset by lower Commercial revenue keep our consolidated estimates fairly constant for ’16 and ’17. The threat to Medicaid Expansion is a new risk.”

According to TipRanks.com, Windley is a top 100 analyst with an average return of 14.1% and a 69.4% success rate. Windley covers the Healthcare sector, focusing on stocks such as Quintiles Transnational, WellCare Health Plans, and Charles River Labs .

Hms Holdings Corp has an analyst consensus of Moderate Buy, with a price target consensus of $22.67.

Viacom Inc. (NASDAQ: VIAB)

In a report released yesterday, John Janedis from Jefferies reiterated a Buy rating on Viacom Inc. (NASDAQ: VIAB), with a price target of $44. The company’s shares closed yesterday at $37.98.

Janedis noted:

“With the speculation around the potential CBS recombination ongoing, it appears as though mgmt. has a credible mandate if VIAB ultimately remains independent. The NT outlook for both domestic advertising and affiliate fees were better than we expected. The weakness in the stock is partially due to the likelihood of further EPS reductions in F17 vs. consensus (JEFe: $3.58 (prior $3.57) / FC: $4.06) Improvement on the ad front: VIAB appears to have cycled through the impact from reduced ad loads earlier than we anticipated (400bps headwind in F4Q). If VIAB can hit its F1Q17 U.S. ad guidance of -3%, it would be the best qtr since F3Q14 (Viacom Vantage, etc. appears to be benefiting the segment). We assume constant currency ad growth outside the U.S. of ~7-8%, with the GBP creating an FX headwind. Affiliate Fee Improvement: While it appears as though getting pulled from Sony Vue may be more than a negotiating tactic, the practical impact on affiliate revenue is immaterial.”

According to TipRanks.com, Janedis is a 4-star analyst with an average return of 5.5% and a 57.9% success rate. Janedis covers the Services sector, focusing on stocks such as Interpublic Group of Companies, Live Nation Entertainment, and Madison Square Garden Co.

Viacom Inc. has an analyst consensus of Moderate Buy, with a price target consensus of $45.82.