The brokerage noted that the new CFO is doing away with quarterly guidance and potentially setting more conservative expectations for investors, which could yield more consistent quarterly beats.
RBC also said that if ground beef prices remain at current levels through 2027, inflation will decelerate to remain flat or decline compared with last year, starting in the second quarter of 2027. That, along with supply chain optimization, could provide upside to margins.
Shares of fast-food chain Shake Shack SHAK.N were up about 1% at $70.15 in premarket trading after RBC Capital Markets initiated coverage on the stock with an outperform rating and a price target of $89.
RBC said the company is at an inflection point, with increasing scale, sophistication in marketing and supply chain potentially driving upside to expectations through at least 2027.
Fifteen of 28 brokerages rate SHAK buy or higher and 13 hold, with a median price target of $82, according to LSEG-compiled data.
Up to the last close, the stock had fallen 14.5% year to date.
