Sweetgreen downgraded to Underweight at Morgan Stanley on lagging sales recovery

Morgan Stanley downgraded Sweetgreen to Underweight from Equal Weight with a price target of $10, down from $14. The firm has “generally have maintained a favorable view” of the brand, though the sales recovery post Covid has lagged versus best-in-class peers, which it expects to continue. The new focus on its automated Infinite Kitchen format, coupled with slower unit growth, creates a more uncertain proposition for investors with “a still unprofitable business no longer growing above its peer group,” the analyst added.