GYG shares skyrocket 33% this week: Is this the recovery we've been waiting for?

Here's what we can expect next out of the Mexican fast-food retailer.

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Guzman Y Gomez Ltd (ASX: GYG) shares are flying 11.7% higher in Wednesday trade, at $20.13 a piece. 

The price rally continues from yesterday's bumper session, where the shares rebounded 18.55% in a day. It means the fast food retailer's shares have soared 32.7% this week alone.

It's a very welcome reprieve for investors after the Mexican-themed fast food retailer's shares hit a historic low of just $15.20 a piece at the close of the ASX last Thursday, ahead of the long Easter weekend. 

The share price recovery means GYG shares are now down just 6.5% year to date and 35.1% over the past 12 months.

A happy young woman in a red t-shirt hold up two delicious burritos.

Image source: Getty Images

What caused the reversal in GYG's share price this week?

GYG posted its Q3 FY26 results ahead of the ASX market open yesterday morning, and investors were clearly thrilled with the result, with many falling over themselves to buy the shares.

The company announced that its network sales grew 19.5% over the quarter and comparable sales grew 6.6% in Australia and 2.2% in the US. GYG also confirmed that five new Australian restaurants bring the company's total number of global locations to 278.

GYG also reaffirmed its full-year guidance, expecting the Australia Segment underlying EBITDA as a percentage of network sales to climb to 6.0 to 6.2% in FY26, versus 5.7% the prior year. 

The company said it is on track to open 32 new Australian restaurants in FY26, with a focus on drive-thrus making up the bulk of planned launches.

Is this the recovery we've all been waiting for?

It most certainly looks like it.

The beaten-down shares have steadily tumbled since late 2024, and this is the first time we've seen a meaningful share price recovery.

I'm confident that the rally can continue going forward, too, with its huge ambitions for business expansion already underway. GYG plans to reach 1,000 restaurants within 20 years.

While its expansion success in Australia so far has been exceptional, the company has fallen short of its overseas expansion goals, particularly in the US. However, the latest results suggest global growth is finally kicking into gear.

How high can GYG shares go?

If analyst sentiment is anything to go by, we can expect to see a lot more upside from GYG shares.

TradingView data shows that analyst sentiment on the outlook for Guzman Y Gomez shares is now mostly bullish. Out of 13 analysts, eight have a buy or strong buy rating, and another four have a hold rating. One has a strong sell rating.

The average target price is $23.03, which implies a potential 14.7% upside at the time of writing. But some think the stock has the potential to soar another 60% to $32 each over the next 12 months.

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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