TD Cowen maintains buy rating on Sweetgreen stock amid loyalty revamp

On Wednesday, TD Cowen analysts reiterated a Buy rating on Sweetgreen Inc (NYSE: SG) with a price target of $25.00, well above the current trading price of $14.47. According to InvestingPro data, analyst targets range from $15 to $30, with the stock showing significant volatility over the past year. The analysts highlighted the company’s ongoing efforts to navigate a challenging sales environment, noting the upcoming relaunch of seasonal bowls in July as a potential catalyst for increasing customer frequency.

The analysts also pointed out that Sweetgreen’s recent changes to its loyalty program, which began in April, are starting to show positive results. Despite an estimated impact of approximately 150 basis points on second-quarter comparable sales, the revamped program is showing signs of increased customer engagement. The company’s revenue grew 11.1% in the last twelve months, though InvestingPro analysis indicates the company is not yet profitable, with a -$35.3 million EBITDA.

In a recent fireside chat with Rebecca Nounou, Sweetgreen’s Vice President, Head of Investor Relations, and Chief of Staff, the company conveyed optimism about the loyalty program. The program is expected to transition from being a neutral factor to a positive influence on performance in the third and fourth quarters, following an accounting-related challenge in the second quarter.

Sweetgreen continues to see strong interest in its loyalty program, with over 20,000 new signups per week. This figure surpasses the total enrollment of the previous Sweetpass+ program, indicating growing customer interest and engagement.

The analysts remain positive about Sweetgreen’s prospects, emphasizing the company’s strategic initiatives to enhance customer loyalty and drive sales growth amid the current market conditions. For deeper insights into Sweetgreen’s financial health and growth potential, InvestingPro offers an extensive research report with over 30 key metrics and expert analysis, part of its coverage of more than 1,400 US stocks.

In other recent news, Sweetgreen Inc. reported its first-quarter 2025 earnings, revealing revenue of $166.3 million, which slightly exceeded the anticipated $165.8 million. The earnings per share (EPS) were in line with forecasts at a negative $0.21. Despite the revenue surpassing expectations, the company faced a decline in same-store sales by 3.1%, which reflects ongoing challenges in maintaining customer traffic. Sweetgreen plans to open over 40 new restaurants in 2025, aiming to boost revenue between $740 million and $760 million. The company expects flat same-store sales and targets a restaurant-level margin of 19.5%. Analysts have noted the company’s efforts in expansion and operational efficiency, with Sweetgreen’s adjusted EBITDA projected to reach $30 million. The company is also addressing potential tariff impacts on restaurant build-out costs and supply chain expenses. These developments indicate Sweetgreen’s focus on growth and strategic initiatives amid a challenging market environment.

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