Shake Shack (NYSE:SHAK) was raised to Outperform from Market Perform at TD Cowen on Thursday, with the firm raising its price target for the stock to $125 from $91 per share.

The firm highlighted the company's margin expansion strategy and new CEO narrative as providing a rare opportunity in the stock.

"We expect multi-year positive adj. EBITDA revisions driven by upside to 2024-26E restaurant level margins and G&A," said TD Cowen.

"Concurrently, a new CEO ushers in a narrative change & presents opportunities to help improve traffic as the brand leans into its scale to embrace the next phase of the business curve," analysts added.

TD Cowen also designated Shake Shack as its top small/mid-cap pick and its number two overall pick.