Cava Group upgraded to Outperform from Neutral at Wedbush

Wedbush upgraded Cava Group to Outperform from Neutral with a price target of $48, up from $35. The firm expects another quarter of upside vs. conservative guidance and consensus estimates in Q4 to validate a comp trajectory towards the mid-single-digit range in the second half of 2024, inclusive of positive transactions. While Wedbush views lower grocery inflation as an incremental threat to the fast casual category in 2024, it also believes Cava’s relative value proposition and maturation cycle contribution to comp positions it to overcome the incremental headwind. Should the firm’s same-store sales growth expectation materialize, Wedbush views current 2024 margin estimates as overly conservative.