CAVA Group Inc (CAVA) PT Raised to $128 at Argus

Argus analyst Christine Dooley raised the price target on CAVA Group Inc (NYSE: CAVA) to $128.00 (from $104.00) while maintaining a Buy rating.

The analyst comments "Our rating on CAVA Group Inc. (NYSE: CAVA) is BUY. CAVA Group operates its namesake chain of fast casual restaurants in the United States. The company, in our view, appears poised to take advantage of growth opportunities in its targeted Mediterranean niche as well as in the fast-casual segment of the restaurant industry. The company has a profitable business model, a clean balance sheet, and an experienced management team. We believe that CAVA’s continued innovation, including new menu items like steak, will drive sales at restaurants, especially as consumers specifically seek out protein menu options. Our long-term growth forecast is a robust 18%. Moving to the stock, from a technical standpoint, the shares have been in a bullish pattern of higher highs and higher lows so far this year, barring the fall after the insider sales disclosure. The valuation outlook appears high compared to industry peers. CAVA’s price/sales ratio of 13.5 is also now above the industry average of 8. Aside from the difficult comparisons, we think the company’s momentum and management’s plans to open new stores offer investors an opportunity, as such, our rating is BUY. We are raising our target price to $128 from $104, implying a 10% gain from current levels."

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