12:09 PM EDT, 07/26/2024 (MT Newswires) -- Sweetgreen's ( SG ) setup remains attractive despite industry challenges, Oppenheimer said in a note Friday.

The restaurant chain is expected to report its Q2 results on Aug. 8, Oppenheimer said, adding that "we identify a compelling case for fundamental upside to 2Q, but also realize investors are concerned 3Q could soften via data points from peers."

Oppenheimer projects upside for Q2 results and said it was optimistic about Sweetgreen's ( SG ) growth and "Infinite Kitchens," and reiterated the company as a "top pick" even with its +116% year-to-date gains, the note said.

The company's strong brand and new initiatives could boost same-store sales by over 200 basis points, while its margins may exceed forecasts due to effective labor management and new unit economics, offering potential upside in 2Q24 and long-term growth.

While overall industry sales are expected to slow, Sweetgreen ( SG ) is well-positioned to outperform, Oppenheimer said, adding that the company's strong brand, new menu items, and operational improvements could drive sales growth beyond market expectations.

Oppenheimer has an outperform rating on Sweetgreen ( SG ) with a price target of $34.

Price: 25.86, Change: +1.46, Percent Change: +5.96