CAVA Group (NYSE:CAVA) Upgraded to "Buy" at Melius Research

Key Points

• Melius Research upgraded CAVA Group to “Buy” from “Hold” and set a $95 price target, implying approximately 82% upside from the stock’s $52.08 opening price.
• CAVA’s latest quarterly results exceeded expectations, with $0.19 in earnings per share and $368.44 million in revenue, up 31.3% year over year.
• The company authorized a $100 million share repurchase program, while analyst sentiment remains moderately bullish with a consensus price target of $88.88.

CAVA Group (NYSE:CAVA - Get Free Report) was upgraded by analysts at Melius Research from a "hold" rating to a "buy" rating in a note issued to investors on Thursday, Marketbeat reports. The brokerage presently has a $95.00 target price on the stock. Melius Research's target price suggests a potential upside of 82.43% from the company's current price.

Other equities analysts have also recently issued research reports about the company. Guggenheim decreased their price objective on CAVA Group from $100.00 to $95.00 and set a "buy" rating for the company in a report on Thursday, August 13th. Northcoast Research upgraded CAVA Group from a "sell" rating to a "neutral" rating in a research report on Thursday, August 13th. Mizuho decreased their price target on CAVA Group from $85.00 to $70.00 and set a "neutral" rating for the company in a report on Wednesday, August 12th. TD Cowen lowered their price objective on CAVA Group from $100.00 to $85.00 and set a "buy" rating on the stock in a research report on Wednesday, August 12th. Finally, Morgan Stanley raised shares of CAVA Group from an "equal weight" rating to an "overweight" rating and raised their price objective for the stock from $86.00 to $90.00 in a research note on Wednesday, July 15th. One investment analyst has rated the stock with a Strong Buy rating, seventeen have issued a Buy rating and ten have given a Hold rating to the stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of $88.88.

CAVA Group Price Performance

Shares of CAVA Group stock opened at $52.08 on Thursday. The firm has a fifty day moving average price of $60.69 and a 200 day moving average price of $73.18. CAVA Group has a 1 year low of $43.41 and a 1 year high of $98.79. The stock has a market cap of $6.08 billion, a PE ratio of 94.68, a price-to-earnings-growth ratio of 4.08 and a beta of 1.80.

CAVA Group (NYSE:CAVA - Get Free Report) last posted its quarterly earnings results on Tuesday, August 11th. The company reported $0.19 EPS for the quarter, beating the consensus estimate of $0.18 by $0.01. The company had revenue of $368.44 million for the quarter, compared to analyst estimates of $360.09 million. CAVA Group had a net margin of 4.82% and a return on equity of 8.28%. The firm's revenue was up 31.3% on a year-over-year basis. During the same period in the prior year, the company earned $0.16 earnings per share. As a group, equities analysts expect that CAVA Group will post 0.55 EPS for the current year.

CAVA Group declared that its Board of Directors has initiated a share repurchase program on Friday, September 18th that allows the company to buyback $100.00 million in outstanding shares. This buyback authorization allows the company to reacquire up to 1.7% of its stock through open market purchases. Stock buyback programs are typically a sign that the company's management believes its stock is undervalued.

Insider Buying and Selling

In other CAVA Group news, insider Douglas Thompson acquired 6,500 shares of the company's stock in a transaction on Monday, August 31st. The shares were bought at an average cost of $66.52 per share, with a total value of $432,380.00. Following the completion of the acquisition, the insider owned 19,371 shares in the company, valued at approximately $1,288,558.92. This trade represents a 50.50% increase in their ownership of the stock. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Insiders own 6.70% of the company's stock.

Institutional Investors Weigh In On CAVA Group

Institutional investors have recently added to or reduced their stakes in the stock. BlackRock Inc. acquired a new stake in shares of CAVA Group in the second quarter valued at about $757,013,000. Primecap Management Co. CA purchased a new stake in CAVA Group during the 2nd quarter valued at about $92,956,000. William Blair Investment Management LLC acquired a new stake in CAVA Group in the 2nd quarter valued at about $89,861,000. Prime Capital Management Co Ltd acquired a new stake in CAVA Group in the 2nd quarter valued at about $80,962,000. Finally, Wellington Management Group LLP lifted its stake in CAVA Group by 76.9% in the 2nd quarter. Wellington Management Group LLP now owns 1,605,508 shares of the company's stock worth $126,000,000 after purchasing an additional 697,699 shares in the last quarter. Institutional investors and hedge funds own 73.15% of the company's stock.

About CAVA Group

CAVA Group, Inc is a fast-casual restaurant company focused on Mediterranean-inspired food and hospitality. Its restaurants offer customizable meals such as grain bowls, salads, pitas and dips, with ingredients and flavors influenced by the cuisines of the Mediterranean region. The company also provides digital ordering, delivery and catering services through its restaurant platform.

CAVA began as a Washington, DC-area restaurant concept and has expanded its operations across the United States.

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