11:38 AM EDT, 05/29/2024 (MT Newswires) -- CAVA Group's ( CAVA ) posted "a clean, much stronger bottom line" in fiscal Q1, and an increase in guidance in the fiscal year signals a "mostly positive near-term catalyst path," Morgan Stanley said Wednesday in a report.

"Near term fundamental indicators continue to be encouraging," the report said. Morgan Stanley boosted the price target on CAVA ( CAVA ) to $85 from $68 and kept the overweight rating

The restaurant chain's value proposition and price are attractive in the current market with some key performance metrics and profit aligning more closely with a prior bull case, Morgan Stanley said.

In the quarter, most key indicators topped expectations with revenue outperforming partly on new-unit productivity. Guidance for comparable sales in the year was increased, assuming moderate to high-single-digit percentage growth for the remaining period, which appears achievable given current positive trends, the report said.

CAVA ( CAVA ) on Tuesday reported fiscal Q1 earnings of $0.12 per diluted share on revenue of $259 million. Analysts polled by Capital IQ expected earnings of $0.04 on revenue of $245.5 million.

Shares of CAVA ( CAVA ) fell 0.9% in recent trading Wednesday.

Price: 81.68, Change: -0.72, Percent Change: -0.87