Baird says Cava Group ‘still a top pick,’ raises target to $54

Baird raised the firm’s price target on Cava Group to $54 from $48 and keeps an Outperform rating on the shares, telling investors that the firm believes the risk/reward remains favorable even when factoring in the recent bounce in the shares. While acknowledging the current valuation is “not for the faint of heart,” the analyst argues a significant premium can be justified by the scarcity of the company’s growth profile and the upward bias to near-term estimates. The firm, which expresses “high conviction” that Cava can deliver results above the firm’s current estimates for Q4 and for 2024, adds that the stock is “still a top pick heading into 2024.”