Shake Shack (SHAK) is at an "inflection" point, with increasing scale and sophistication in marketing and supply chain likely to drive upside to estimates, RBC said in a Tuesday note.
"The new CFO doing away with quarterly guidance and potentially setting more conservative expectations could yield more consistent quarterly beats," the report said.
The note said same-store sales are expected to accelerate in 2027, driven by paid media and higher frequency from 1p app, better-planned menu innovation pipeline, and loyalty.
The note also pointed to opportunity to hedge beef exposure to reduce volatility and provide better visibility into margins. Beef is 35% of the commodity basket and 10% of total revenue.
RBC initiated coverage with an outperform rating and an $89 price target, citing improving fundamentals combined with stock trading at near-trough historical valuations.
Price: 69.01, Change: -0.39, Percent Change: -0.56
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