Stifel lowers Cava stock price target to $125 on difficult comps

Stifel lowered its price target on Cava Group Inc (NYSE:CAVA) to $125 from $175 on Tuesday, while maintaining a Buy rating on the Mediterranean restaurant chain. The stock, currently trading at $74.71, sits near its 52-week low of $70, though InvestingPro data shows analyst targets ranging from $90 to $125.

The firm reduced its second-quarter same-restaurant sales growth estimate to 5.5%, below the Street consensus of 6.9%, citing difficult comparisons following the launch of Grilled Steak last year.

Despite the near-term adjustment, Stifel maintained its full-year same-restaurant sales growth estimate of approximately 7%, which aligns with Cava’s guidance for a three-year stack in the high 30% range.

Stifel identified three key factors for Cava’s longer-term valuation: average unit volume growth, margin expansion, and unit growth. The firm believes average unit volumes will likely expand faster than anticipated as brand awareness grows.

The research firm recommended investors "take advantage of short-term, sentiment-driven pullbacks" in the stock, suggesting continued confidence in Cava’s long-term growth trajectory despite the reduced price target.

In other recent news, CAVA Group Inc reported strong first-quarter 2025 results, with an adjusted EBITDA of $44.9 million, surpassing both Loop Capital’s projection of $40.8 million and the consensus estimate of $43.9 million. The company’s adjusted earnings per share (EPS) came in at $0.22, exceeding Loop Capital’s forecast of $0.17 and the consensus estimate of $0.14. Consolidated revenues for the first quarter reached $329 million, marking a 28% year-over-year increase and beating both Loop Capital’s estimate of $307 million and the consensus estimate of $327 million. Despite these robust financial results, Loop Capital maintained a Hold rating with a $100 price target.

Meanwhile, Bernstein reiterated its Outperform rating with a $115 price target, noting CAVA’s strong performance across various income and geographic segments. JPMorgan increased its price target to $115 from $110, maintaining an Overweight rating, citing CAVA’s potential for significant expansion in the U.S. Stifel also maintained a Buy rating with a $175 price target, highlighting the company’s initiatives to bolster sales momentum. Lastly, Citi raised its price target slightly to $115, maintaining a Neutral rating, acknowledging CAVA’s strong results in a challenging industry environment.

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