Wall Street is beginning to weigh in on one of the restaurant industry’s newest public stocks, and Bank of America sees considerable room for Jersey Mike’s Subs to expand despite decades of growth.
Jersey Mike’s Subs (JMKE) completed its initial public offering in late July at $23 per share. The company sold roughly 13.8 million shares itself and used approximately $301 million of net proceeds to repay a portion of its outstanding debt, while selling stockholders offered another 29.7 million shares.
BofA analyst Sara Senatore initiated coverage of Jersey Mike’s with a Buy rating and a $27 price objective, according to an Aug. 24 note given to TheStreet. The target represented roughly 13% upside from the $23.86 share price used in the report.
Senatore’s bullish case rests on continued same-store sales gains, attractive returns for franchisees and a domestic restaurant footprint that BofA believes remains far from saturated.
BofA sees a long runway for Jersey Mike’s
Jersey Mike’s ended 2025 with 3,256 restaurants and has outlined a long-term target of more than 15,000 global locations, including at least 7,500 in the U.S. The company also disclosed a pipeline of more than 1,600 domestic restaurants, with more than 90% of signed U.S. development coming from existing franchise owners.
BofA thinks even that goal could leave room on the table.
Using Raleigh-area restaurant density as a benchmark, the bank estimates the U.S. could eventually support 8,752 Jersey Mike’s locations, topping management’s already ambitious 7,500-plus domestic target.
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A more conservative state-level saturation analysis produced an estimate of more than 6,800 domestic restaurants. BofA also sees international expansion as another layer of growth, with hundreds of locations already committed across Canada, the U.K. and Ireland.
The economics behind those openings are central to the thesis. BofA estimates current Jersey Mike’s restaurants generate roughly $1.4 million in average unit volumes, 15% to 16% restaurant-level margins and cash-on-cash returns above 40% on an investment of around $515,000.
Management’s longer-term targets call for average unit volumes above $2 million, restaurant-level margins of 17% to 18% and returns on invested capital above 60%.
Jersey Mike’s has more than one growth lever
Restaurant openings are only part of BofA’s argument. Jersey Mike’s has recorded 20 consecutive years of positive same-store sales growth, while Senatore sees additional opportunities from menu innovation, digital ordering, loyalty and a changing approach to marketing.
Digital already represents 42% of sales, according to the BofA report, yet paid social accounts for less than 1% of media spending. Management plans to shift more of its marketing budget toward conversion-focused channels, giving the company another way to turn its already-high brand awareness into more frequent visits.
The strategy builds on an asset-light model that is almost entirely franchised. Jersey Mike’s said in its IPO prospectus that digital and delivery represent one of its biggest opportunities to lift average unit volumes, with stores already equipped to handle higher online ordering volumes.
BofA’s $27 target assumes Jersey Mike’s eventually reaches 7,500 domestic restaurants and 850 international restaurants by 2036, with domestic average unit volumes climbing to $2 million. Under that framework, Senatore estimates systemwide sales could reach roughly $17.1 billion and adjusted EBITDA could rise to about $1.5 billion.
There are still risks. BofA pointed to leverage and sponsor control as the main offsets to its Buy thesis, while slower restaurant growth, weaker new-store productivity, pressure on franchisee returns and consumer softness could also challenge the outlook.
Nothing material has emerged on the operating side since BofA issued its Aug. 24 report. Subsequent regulatory filings showed existing investors, including Blackstone-related entities, selling shares through a partial exercise of the underwriters’ IPO option, which was contemplated as part of the offering rather than representing a change to Jersey Mike’s underlying business outlook.
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