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Investing.com - KeyBanc initiated coverage on CAVA Group Inc (NYSE:CAVA) with an Overweight rating and set a price target of $100.00, representing significant upside from the current price of $82.32. According to InvestingPro data, CAVA has shown strong momentum with an 11.26% return over the past week.
The investment firm views CAVA as the leading brand in the fast-growing Mediterranean fast-casual segment, with few direct competitors in the space.
KeyBanc compared CAVA’s potential to Chipotle (NYSE:CMG)’s trajectory over the past two decades, suggesting the company could define the Mediterranean category and expand into new markets across the United States.
The analyst noted that CAVA’s new store returns rank among the industry’s best, which should support sustained double-digit unit growth, while same-store sales are expected to outperform despite likely near-term moderation.
While acknowledging CAVA stock trades at approximately 115 times and 45 times KeyBanc’s 2026 estimated EPS and EBITDA respectively, the firm believes the company’s pricing power, expansion opportunities, and potential operational efficiencies can drive sustainable earnings growth.
In other recent news, Cava Group reported strong financial results for the first quarter of 2025, with consolidated revenues reaching $329 million, marking a 28% increase year-over-year. The company’s adjusted earnings per share (EPS) came in at $0.22, surpassing both Loop Capital’s forecast of $0.17 and the consensus estimate of $0.14. Loop Capital maintained a Hold rating with a $100 price target, while Bernstein reiterated an Outperform rating with a $115 target, highlighting Cava’s robust same-store sales growth of 10.8%. JPMorgan also expressed confidence in Cava’s long-term potential, raising its price target to $115 and maintaining an Overweight rating, citing the company’s expansion prospects in the U.S.
Stifel, however, lowered its price target from $175 to $125, maintaining a Buy rating, due to challenging comparisons from the previous year. Despite this, Stifel remains optimistic about Cava’s long-term growth, noting factors such as average unit volume growth and margin expansion. In corporate governance news, Cava’s shareholders approved the election of board members and executive compensation at their annual meeting. Additionally, Deloitte & Touche LLP was ratified as the company’s independent registered public accounting firm for the fiscal year ending December 28, 2025. These developments reflect the company’s ongoing strategic and financial initiatives.
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