In a report released yesterday, Jon Tower from Citi maintained a Hold rating on CAVA Group, Inc., with a price target of $60.00.
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Jon Tower’s rating is based on a combination of factors that reflect both the challenges and potential of CAVA Group, Inc. While the company has maintained its unit growth projections and anticipates significant year-over-year growth in 2026, recent negative revisions to its 2025 comparable sales and EBITDA outlook have tempered expectations. The company is in the early stages of its development, with various potential growth drivers such as new products and marketing initiatives. However, the lack of a clear short-term catalyst for positive comparable sales growth makes it difficult to justify a higher valuation multiple at this time.
Key challenges include the current demand softness in certain markets and the company’s strategic decision to avoid discounting, which, while beneficial for the brand long-term, may limit immediate sales growth. Additionally, external factors such as commodity and labor inflation further complicate the outlook for margin expansion. Despite these hurdles, technological advancements and operational improvements are underway, which could enhance customer satisfaction and operational efficiency in the future. Given these mixed signals, a Hold rating reflects a cautious yet optimistic stance on the company’s long-term potential.
Tower covers the Consumer Cyclical sector, focusing on stocks such as Cracker Barrel, McDonald’s, and CAVA Group, Inc.. According to TipRanks, Tower has an average return of 11.3% and a 57.33% success rate on recommended stocks.
In another report released today, Barclays also maintained a Hold rating on the stock with a $52.00 price target.