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On Monday, Stifel has increased the price target for CAVA Group Inc (NYSE:CAVA) shares to $110, up from the previous target of $90, while reiterating a Buy rating on the stock. The firm anticipates CAVA Group will deliver another robust quarter marked by solid same-restaurant sales (SRS) gains and impressive new store performances.
The optimism surrounding the company's upcoming quarterly results is based on the belief that CAVA is experiencing an organic flywheel effect. This effect is a result of a combination of the brand's appeal, its crave-worthy product offerings, and increased consumer awareness driven by the expansion of its unit count.
According to Stifel's analysis of mobile location data, CAVA Group has enjoyed a sequential improvement in customer traffic from the first quarter.
The success of the company's Grilled Steak offering has been highlighted as a significant contributor to the sales momentum, which reportedly sold out quickly in numerous markets. This product launch is seen as evidence of CAVA's ability to sustain its sales growth.
Despite high expectations for the company, Stifel suggests that investors could benefit from any market volatility. Short-term sentiment disruptions may present buying opportunities, as the firm believes CAVA's fundamentals remain strong. The new 12-month price target of $110 reflects Stifel's confidence in the company's continued performance and growth trajectory.
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