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Shake Shack said to aim for $1 billion IPO valuation

Shake Shack, the burger chain started by restauranteur Danny Meyer as a kiosk in a New York City park, is preparing for an initial public offering that could value it as high as $1 billion, people familiar with the matter said.

At that level, Shake Shack would debut at 50 times projected earnings of about $20 million this year, the people said, asking not to be named because the details are private. The company has tapped JPMorgan Chase & Co. and Morgan Stanley to manage the share sale, said the people.

That valuation would put it in line with other dining chains that have tapped into investor appetite for new stocks in recent years. El Pollo Loco Holdings Inc. (LOCO), which raised $123 million in July, now trades at about 60 times projected 2014 earnings, while Potbelly (PBPB) Corp. trades at over 64 times estimated earnings, data compiled by Bloomberg show.

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