Loop starts Cava at Hold, says positives priced in

Loop Capital analyst Alton Stump last night initiated coverage of Cava Group with a Hold rating and $40 price target. The analyst is confident Cava can reach its targeted domestic unit count of 1,000-plus units by 2032. The firm believes Cava deserves to trade at a “substantial premium” to its peer group average given the company is in the early stages of its unit growth story, has an “impressive” same-store sales growth profile and possesses a unique Mediterranean-style fast-casual concept. However, these positive attributes are reflected in the company’s current valuation, the analyst tells investors in a research note.