Sweetgreen’s Resilience and Growth Potential: A Buy Rating Amid Short-Term Challenges

William Blair analyst Sharon Zackfia has reiterated their bullish stance on SG stock, giving a Buy rating yesterday.

Sharon Zackfia’s rating is based on several factors that suggest a positive outlook for Sweetgreen despite recent challenges. The company’s first-quarter results met the high end of guidance, indicating resilience and potential for growth. Although April saw a downturn due to weaker urban lunch business and the timing of Easter and spring breaks, these are seen as temporary setbacks.
Furthermore, the introduction of a loyalty program, while initially impacting comps, is expected to drive future customer engagement and sales. The revised guidance reflects a cautious but optimistic view, with expectations for stabilization and recovery in the coming quarters. These elements combined support the Buy rating, as they highlight Sweetgreen’s ability to navigate short-term hurdles while positioning itself for long-term success.

Zackfia covers the Consumer Cyclical sector, focusing on stocks such as CarMax, Lululemon Athletica, and Royal Caribbean. According to TipRanks, Zackfia has an average return of 12.5% and a 53.36% success rate on recommended stocks.

In another report released yesterday, TD Cowen also maintained a Buy rating on the stock with a $25.00 price target.