Citi Raises CAVA Group Price Target to $115 After Q2 Beat

Stifel lowered its price target on CAVA Group (NYSE:CAVA) to $125 from $175 while maintaining a Buy rating, citing near-term sales softness but reaffirming confidence in the brand’s long-term growth trajectory.

The firm revised its second-quarter same-restaurant sales (SRS) estimate to 5.5%, down from the Street’s 6.9% forecast, due to tough comparisons following last year's successful launch of grilled steak. However, the full-year SRS projection remains around 7%, in line with the company’s guidance for a high-30% three-year stack.

Despite trimming short-term expectations, Stifel remains constructive on CAVA’s outlook. Analysts see accelerating average unit volume (AUV) growth as the brand continues to expand and benefit from rising consumer awareness. This mirrors trends seen in other successful fast-casual concepts where newer locations outperform earlier cohorts.

With AUV expansion, margin improvement, and unit growth forming the core of CAVA’s valuation story, Stifel expects the company to deliver upside over time. They suggest that sentiment-driven dips may offer attractive entry points for long-term investors.

CAVA Group, Inc., listed on the NYSE:CAVA, is a prominent player in the fast-casual dining sector. The company is known for its Mediterranean-inspired menu and has been expanding its footprint through strategic growth initiatives. As CAVA prepares to release its first-quarter 2025 earnings on May 15, analysts are keenly observing the company's financial performance.

Wall Street estimates CAVA's earnings per share (EPS) to be $0.14, aligning with the Zacks Consensus Estimate. This reflects a 16.7% increase from the previous year's EPS of $0.12. The anticipated revenue of $327.7 million is slightly below the Zacks estimate of $330.6 million but still marks a significant 27.7% growth from the same period last year. This growth is attributed to increased customer traffic and enhancements in digital platforms.

CAVA has a history of surpassing earnings expectations, having exceeded the Zacks Consensus Estimate in three of the last four quarters with an average surprise of 62.6%. This track record, combined with a favorable average brokerage recommendation (ABR) of 1.75, suggests strong confidence among analysts. Notably, 62.5% of the 16 brokerage firms have given CAVA a Strong Buy recommendation, indicating a positive outlook for the company's stock.

The company's financial metrics provide further insights into its valuation. CAVA's price-to-earnings (P/E) ratio is approximately 87.64, indicating that investors are willing to pay a premium for its earnings. The price-to-sales ratio stands at about 11.95, and the enterprise value to sales ratio is roughly 11.96, reflecting the company's valuation in relation to its sales. These figures suggest that investors have high expectations for CAVA's future growth.

CAVA's financial health is underscored by its current ratio of approximately 2.97, indicating strong short-term financial stability. The debt-to-equity ratio of about 0.54 shows a moderate level of debt compared to equity, suggesting a balanced approach to financing. As CAVA prepares to release its earnings, the management's discussion of business conditions will be crucial in determining the sustainability of any immediate price changes and future earnings expectations.

CAVA Group (NYSE:CAVA) saw its shares jump over 16% in pre-market today after reporting third-quarter results that significantly outpaced Wall Street expectations. The Mediterranean fast-casual restaurant chain delivered adjusted earnings per share of $0.15, more than double the Wall Street analyst forecast of $0.07. Revenue for the quarter soared to $241.5 million, beating the consensus estimate of $212.79 million and marking a 39% increase for the same period last year.

CAVA’s impressive growth was fueled by an 18.1% increase in same-restaurant sales, driven by a 12.9% rise in guest traffic. The company also expanded its footprint by opening 11 net new restaurants during the quarter, bringing its total to 352 locations.

Restaurant-level profit margins improved to 25.6%, up from 25.1% a year earlier, despite challenges such as higher labor costs and expenses related to the introduction of grilled steak. These results underscored the brand’s strong market position and its ability to attract a broad customer base.

Buoyed by its strong performance, CAVA raised its full-year 2024 guidance. The company now anticipates same-restaurant sales growth of 12% to 13%, up from its previous projection of 8.5% to 9.5%, signaling continued confidence in its growth trajectory.

CAVA Group (NYSE:CAVA) saw its shares jump over 16% in pre-market today after reporting third-quarter results that significantly outpaced Wall Street expectations. The Mediterranean fast-casual restaurant chain delivered adjusted earnings per share of $0.15, more than double the Wall Street analyst forecast of $0.07. Revenue for the quarter soared to $241.5 million, beating the consensus estimate of $212.79 million and marking a 39% increase for the same period last year.

CAVA’s impressive growth was fueled by an 18.1% increase in same-restaurant sales, driven by a 12.9% rise in guest traffic. The company also expanded its footprint by opening 11 net new restaurants during the quarter, bringing its total to 352 locations.

Restaurant-level profit margins improved to 25.6%, up from 25.1% a year earlier, despite challenges such as higher labor costs and expenses related to the introduction of grilled steak. These results underscored the brand’s strong market position and its ability to attract a broad customer base.

Buoyed by its strong performance, CAVA raised its full-year 2024 guidance. The company now anticipates same-restaurant sales growth of 12% to 13%, up from its previous projection of 8.5% to 9.5%, signaling continued confidence in its growth trajectory.

• Cava Group, Inc. (NYSE:CAVA) receives a new price target of $140 from Citigroup, indicating confidence in its market performance.
• The company's stock has seen a 68.5% surge over the past three months, outperforming industry peers and the broader market.
• CAVA is expected to report an EPS of $0.11 and revenue of $234.45 million in its upcoming earnings release, highlighting its robust growth trajectory.

Cava Group, Inc. (NYSE:CAVA) is a prominent player in the fast-casual dining sector, known for its Mediterranean-inspired menu. The company has been making waves with its innovative offerings and strategic market expansions. Competing with industry giants like Chipotle Mexican Grill, Inc. and Domino's Pizza, Inc., CAVA has managed to carve out a significant niche for itself.

On October 29, 2024, Jon Tower from Citigroup set a new price target for CAVA at $140, a slight increase from its current stock price of $138.47. This adjustment from a previous target of $115, as reported by TheFly, reflects growing confidence in CAVA's market performance. The stock's recent momentum, highlighted by Zacks Investment Research, supports this optimism.

CAVA's stock closed at $138.65, marking a 1.53% increase from its previous close. This performance outpaced the S&P 500's gain of 0.22% and the Dow's decline of 0.33%. Over the past month, CAVA's shares have risen by 7.66%, outperforming the Retail-Wholesale sector's decline of 0.42% and the S&P 500's gain of 1.47%. This strong performance is attributed to menu innovations and market expansion.

Investors are eagerly awaiting CAVA's earnings release on November 12, 2024. The company is expected to report an EPS of $0.11, an 83.33% growth from the same quarter last year. Revenue is projected to reach $234.45 million, a 33.55% increase from the previous year's quarter. These figures underscore CAVA's robust growth trajectory.

CAVA's stock has surged by 68.5% over the past three months, significantly outperforming its industry peers and the broader market. The company's market capitalization stands at approximately $15.83 billion, with a trading volume of 1,912,652 shares. Technical indicators suggest continued strong performance, as the stock trades above its 50-day moving average, indicating robust market confidence.

• Cava Group, Inc. (NYSE:CAVA) receives a new price target of $140 from Citigroup, indicating confidence in its market performance.
• The company's stock has seen a 68.5% surge over the past three months, outperforming industry peers and the broader market.
• CAVA is expected to report an EPS of $0.11 and revenue of $234.45 million in its upcoming earnings release, highlighting its robust growth trajectory.

Cava Group, Inc. (NYSE:CAVA) is a prominent player in the fast-casual dining sector, known for its Mediterranean-inspired menu. The company has been making waves with its innovative offerings and strategic market expansions. Competing with industry giants like Chipotle Mexican Grill, Inc. and Domino's Pizza, Inc., CAVA has managed to carve out a significant niche for itself.

On October 29, 2024, Jon Tower from Citigroup set a new price target for CAVA at $140, a slight increase from its current stock price of $138.47. This adjustment from a previous target of $115, as reported by TheFly, reflects growing confidence in CAVA's market performance. The stock's recent momentum, highlighted by Zacks Investment Research, supports this optimism.

CAVA's stock closed at $138.65, marking a 1.53% increase from its previous close. This performance outpaced the S&P 500's gain of 0.22% and the Dow's decline of 0.33%. Over the past month, CAVA's shares have risen by 7.66%, outperforming the Retail-Wholesale sector's decline of 0.42% and the S&P 500's gain of 1.47%. This strong performance is attributed to menu innovations and market expansion.

Investors are eagerly awaiting CAVA's earnings release on November 12, 2024. The company is expected to report an EPS of $0.11, an 83.33% growth from the same quarter last year. Revenue is projected to reach $234.45 million, a 33.55% increase from the previous year's quarter. These figures underscore CAVA's robust growth trajectory.

CAVA's stock has surged by 68.5% over the past three months, significantly outperforming its industry peers and the broader market. The company's market capitalization stands at approximately $15.83 billion, with a trading volume of 1,912,652 shares. Technical indicators suggest continued strong performance, as the stock trades above its 50-day moving average, indicating robust market confidence.

Argus analysts raised their price target for CAVA Group Inc (NYSE:CAVA) to $128, up from $104, while maintaining a Buy rating on the stock.

The analysts' positive outlook on CAVA Group stems from the company’s strong position in the fast-casual restaurant market, particularly within the growing Mediterranean cuisine segment. The analysts noted that CAVA is well-positioned to capitalize on expansion opportunities, supported by a solid business model, a healthy balance sheet, and a seasoned leadership team. The company’s ability to innovate, including the introduction of new menu offerings like steak, is expected to boost restaurant sales, particularly as more consumers seek protein-rich options.

The analysts forecast an impressive long-term growth rate of 18% for CAVA. From a technical perspective, the stock has shown a bullish trend, with consistent higher highs and higher lows throughout the year, despite a brief dip following insider sales disclosures. Although CAVA's valuation, with a price-to-sales ratio of 13.5, exceeds the industry average of 8, the analysts believe the company’s growth momentum, combined with management’s plans to expand by opening new locations, presents a solid investment opportunity.