Sweetgreen’s Strategic Initiatives and Financial Performance Justify Buy Rating Despite Challenges

Analyst Andrew Charles from TD Cowen maintained a Buy rating on Sweetgreen (SG – Research Report) and decreased the price target to $25.00 from $27.00.

Andrew Charles’s rating is based on a combination of factors, including Sweetgreen’s recent financial performance and strategic initiatives. Despite a challenging environment with tariffs impacting sales expectations, Sweetgreen’s Infinite Kitchens have shown positive cash-on-cash returns, which is a promising sign for future profitability.
Additionally, Sweetgreen’s first-quarter adjusted EBITDA surpassed both the firm’s and consensus estimates, driven by better-than-expected same-store sales and improved restaurant-level margins. The company’s strategic efforts, such as the Korean BBQ collaboration and adjustments to their loyalty program, are expected to enhance sales in the latter half of the year. These factors contribute to Andrew Charles’s confidence in maintaining a Buy rating for Sweetgreen, despite some near-term challenges.

Charles covers the Consumer Cyclical sector, focusing on stocks such as Dutch Bros Inc, Wendy’s, and Yum! Brands. According to TipRanks, Charles has an average return of 9.6% and a 55.73% success rate on recommended stocks.

In another report released on May 5, UBS also maintained a Buy rating on the stock with a $30.00 price target.