Piper Sandler bumps Cava to overweight after stock pullback

Investing.com -- Piper Sandler upgraded CAVA Group Inc (NYSE: CAVA) to “Overweight” from “Neutral” following a sharp pullback in its stock given strong fundamentals and long-term growth potential in the fast-casual restaurant sector.

Cava shares are down about 20% year-to-date and roughly 33% this month, creating what the firm sees as an opportunity to re-enter the stock. Piper Sandler highlighted Cava’s ability to navigate a challenging consumer environment, noting that the company has taken relatively modest menu price increases compared to industry peers, which has helped drive traffic outperformance.

The firm also pointed to improved unit economics, with Cava now targeting higher average unit volumes and restaurant-level margins than previously forecasted.

Piper Sandler set a price target of $115, down from $142, though still representing about 28% upside from current levels. with primary risk as broader consumer spending trends and potential traffic declines across the restaurant industry.

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