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Research Alert: CFRA Lowers Opinion On Shares Of Cava Group, Inc. To Hold From Buy
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Research Alert: CFRA Lowers Opinion On Shares Of Cava Group, Inc. To Hold From Buy
May 29, 2024 3:00 AM

05:35 AM EDT, 05/29/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lift our 12-month target to $85 from $65, 95x our 2024 EV/EBITDA, against our 2024 adj-EBITDA of $108M. We raise our 2024 EPS to $0.28 from $0.20 and 2025's to $0.30 from $0.28. CAVA ( CAVA ) posts Q1 EPS of $0.12, $0.08 above consensus. Revenue of $259M (+27.5% Y/Y) was $66M above consensus. Adj-EBITDA rose to $33M vs. $18M consensus, with margin widening to 12.9%. CAVA's ( CAVA ) comp sales grew 2.3% vs. the 0.6% consensus, driven by price and mix (+3.5%), partly offset by traffic (-1.2%). CAVA ( CAVA ) had strong results and raised its 2024 comp sales guidance by 100 bps to 5.5%, based on higher mix and traffic targets. This is largely due to the expected benefit of the grilled steak roll-out across stores in June and its "Connected Kitchen" initiative, which aims to use data and AI to drive efficiencies. We also note CAVA's ( CAVA ) revamped rewards program expected by year-end and the step-up in restaurant AUV in its greenfield markets like Chicago. Nonetheless, given the run-up in CAVA's ( CAVA ) share price YTD, we prefer a more cautious view.

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