Stifel lowers Cava Group price target to $125, recommends buying on pullbacks

Stifel analyst Chris O’Cull lowered the firm’s price target on Cava Group (CAVA) to $125 from $175 and keeps a Buy rating on the shares, telling investors that the firm believes Q2 comps could fall modestly below the Street mean, primarily due to the difficult lap created by the successful launch of Grilled Steak in early June 2024. The firm reduced its Q2 same-restaurant sales growth projection to 5.5%, below the Street at 6.9%, but its full-year SRS growth estimate of about 7% still reflects the company’s guidance of a three-year stack in the high 30% range, the analyst tells investors. The firm, which believes average unit volumes will likely expand at a faster rate than anticipated as brand awareness grows, expects this dynamic to drive upside for the foreseeable future and recommends investors “take advantage of short-term, sentiment-driven pullbacks.”