Analyst Brian Harbour of Morgan Stanley maintained a Hold rating on CAVA Group, Inc., reducing the price target to $97.00.
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Brian Harbour has given his Hold rating due to a combination of factors impacting CAVA Group, Inc. While the company’s fundamentals remain strong, including robust new store performance and controlled cost lines leading to an EBITDA beat, there are concerns about the recent sales performance. The stock was not priced for the larger-than-expected comparable sales miss and the cut in full-year same-store sales guidance, which could put pressure on the stock price.
Despite these challenges, the company is showing promising signs with sequentially improving same-store sales and a strong pipeline of new store openings. However, there are credibility issues with the implied guidance, and the valuation remains a hurdle. This suggests the stock might be nearing a better entry point, but for now, the valuation needs to settle, prompting the Hold rating as the market recalibrates expectations.
In another report released today, UBS also maintained a Hold rating on the stock with a $75.00 price target.