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Investing.com - UBS lowered its price target on Sweetgreen Inc (NYSE:SG) to $19.00 from $30.00 on Wednesday, while maintaining a Buy rating on the stock. The company’s shares, currently trading at $13.34, have fallen over 50% in the past year, according to InvestingPro data.
The price target reduction reflects broader segment valuation pressures and persistent macroeconomic headwinds affecting the category and Sweetgreen’s performance. UBS has reduced its 2025-27 EBITDA estimates by 16-20% for the company. InvestingPro data shows the company’s current EBITDA stands at -$35.3 million, with a moderate debt level and current ratio of 1.97x.
For Sweetgreen’s second-quarter earnings, UBS anticipates challenged same-store sales trends due to category and broader macroeconomic weakness. Market expectations suggest second-quarter same-store sales could fall below the consensus estimate of a 5.2% decline.
Investors remain concerned about recent sales pressure and potential lingering headwinds related to value proposition and macroeconomic conditions. Additional concerns include caution around a potentially limited number of store closures and a possible capital raise in the future.
Despite these challenges, UBS believes Sweetgreen maintains sales drivers to support improved trends in coming quarters, citing the company’s leading development trajectory, kitchen automation, menu innovation, and loyalty program revamp as factors supporting solid same-store sales and EBITDA growth over the coming years. With revenue growth of 11.1% in the last twelve months and analyst targets suggesting up to 48% upside potential, investors can access detailed analysis and 10 additional exclusive insights through InvestingPro’s comprehensive research report.
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. However, the company’s earnings per share (EPS) matched analyst predictions at a negative $0.21. Stockholders approved all proposals at the company’s virtual annual meeting, electing all nine director nominees, with Dawn Ostroff receiving the highest support. Barclays (LON:BARC) initiated coverage on Sweetgreen with an equalweight rating and set a price target of $16.00, citing the company’s strong growth metrics but noting challenges in valuation. Meanwhile, TD Cowen maintained a Buy rating on Sweetgreen, highlighting the positive impact of recent changes to its loyalty program and the potential boost from the upcoming relaunch of seasonal bowls. These developments reflect ongoing efforts by Sweetgreen to navigate a challenging sales environment.
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