Bernstein maintains CAVA stock Outperform with $115 target

On Friday, Bernstein analysts, led by Danilo Gargiulo, reiterated their Outperform rating on shares of CAVA Group Inc (NYSE:CAVA) with a steady price target of $115.00. Currently trading at $95.54 with a market capitalization of $11.45 billion, CAVA has demonstrated strong momentum with a 5.48% gain over the past week. Gargiulo highlighted several factors that paint a positive outlook for the fast-casual restaurant chain, despite a post-market dip in share prices.

The analyst pointed out that CAVA’s same-store sales (SSS) growth of 10.8% in the first quarter of 2025 slightly missed the buyside expectations but exceeded the consensus estimate of 10.4%. With impressive revenue growth of 32.25% over the last twelve months, Gargiulo suggested that the company’s performance indicators signal a promising future trajectory. He noted the brand’s strong performance across different income and geographic segments, particularly in the DMV area, where CAVA holds a significant 15% of its sales, despite concerns over the cryptocurrency market volatility, often referred to as "DOGE-fears."According to InvestingPro, CAVA maintains a strong financial health score of GOOD, with liquid assets exceeding short-term obligations. Subscribers can access 14 additional exclusive ProTips and comprehensive analysis in the Pro Research Report.

Bernstein’s analysis also underscored CAVA’s ability to manage its supply chain effectively amidst potential tariff risks and the increasing productivity of its new units. The management’s decision to maintain the same-store sales guidance was interpreted as a conservative approach in a volatile consumer market.

Gargiulo concluded that while the stock experienced a recent pullback, its valuation is expected to benefit from a secure near-term outlook and long-term growth potential. The key long-term growth drivers for CAVA are likely to materialize, providing a positive backdrop for the stock’s future performance.

In other recent news, CAVA Group Inc. reported impressive first-quarter 2025 earnings, significantly surpassing expectations with an earnings per share (EPS) of $0.22 against a forecast of $0.02. The company also exceeded revenue projections, reporting $331.83 million compared to the expected $280.93 million. CAVA’s strong performance included a 28.2% year-over-year increase in revenue and a notable 83.7% rise in net income to $25.7 million. Analyst firms have responded to these results with adjustments to their price targets. JPMorgan increased CAVA’s stock target to $115, maintaining an Overweight rating, while Stifel reiterated a Buy rating with a $175 target, noting the company’s 10.8% increase in comparable store sales. Citi also adjusted its price target to $115, maintaining a Neutral rating, citing CAVA’s positive standing in a challenging industry environment. The company has projected full-year comparable sales growth of 6-8% and plans to open 64-68 new restaurants in 2025. CAVA’s strategic initiatives and recent expansions into new markets such as Indiana and Miami have been well-received, contributing to strong brand recognition and consumer engagement.

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