Because Piper Sandler lacks the pricing power to compete with the dining at home (FAH) trend and foot traffic continues to slow, the company has turned to Dutch Bros. (NYSE: BROS), ShakeShack (NYSE: SHAK) and Sweetgreen (NYSE:SG) to record a more balanced risk-return ratio and downgraded the three from “overweight” to “neutral”.

Inflation trends between FAH and away-from-home dining (“FAFH”) show that FAFH inflation has been about 300 basis points or more higher than FAH inflation for 14 consecutive months, notes Piper Sandler analyst Brian Mullan, leaving the fast-casual dining sector little room for even incremental adjustments in menu prices.

For Dutch Bros (BROS), the downgrade ended a four-day winning streak for the stock after disappointing forecasts sent shares plunging as much as 28%. The downgrade also reflects the likelihood that the broader consumer backdrop will offset the uptick from the company’s aggressive promotional efforts. Specific to Dutch Bros’ downgrade is the hiring of CEO Brian Niccol at its competitor, which is “likely to bring about positive changes” at Starbucks (NASDAQ:SBX), adds Mullan.

In addition to the downgrade, Mullan cut his price target for Dutch Bros by 12% to $36.

Mullan’s downgrade on Shake Shack (SHAK) assumes the same fundamental changes in the fast-casual category that influenced the downgrade on BROS, namely restrictions on menu pricing and efforts to optimize operations and financial discipline that are hampered by the deteriorating industry environment. While he remains optimistic about SHAK’s ability to improve and grow the business over time, the risk-reward ratio has become more balanced at current levels, justifying a neutral rating and a -6% price target revision to $114.

Finally, Sweetgreen (SG) was also downgraded to Neutral from Overweight at Piper Sadler, with a corresponding 18% increase in the price target to $39. Like its peers in the category, a share price increase for SG “may be a little harder to achieve later in the year,” despite confidence in the management team’s ability to steer long-term growth.

Mullan assures investors that he is not negative on SG, but rather sees the “current risk-reward ratio at current levels” as more balanced now that the earnings season for the fast-casual sector has concluded and macroeconomic considerations have been made that could impact FAFH.

Despite his confidence in the company, Mullan’s downgrade has hurt Sweetgreen’s shares more than 6% lower on Monday, moving away from its two-year high reached on Friday.