Wall Street Zen Downgrades Sweetgreen (NYSE:SG) to Strong Sell

Key Points

• Wall Street Zen downgraded Sweetgreen to “strong sell,” while the broader analyst consensus remains “hold” with an average price target of $7.19. Several firms also lowered their targets, including TD Cowen to $5.00.
• Sweetgreen’s second-quarter results missed expectations: the company reported a $0.22-per-share loss versus the anticipated $0.13 loss, while revenue of $192.66 million came in below estimates despite rising 3.8% year over year.
• Weak customer traffic and food-safety concerns pressured the outlook: same-store sales fell 6.2%, and management now expects full-year comparable sales to decline 7%–8%; shares opened at $5.39, near their 12-month low.

Sweetgreen (NYSE:SG - Get Free Report) was downgraded by equities researchers at Wall Street Zen from a "sell" rating to a "strong sell" rating in a note issued to investors on Saturday.

A number of other equities research analysts have also recently weighed in on the company. TD Cowen dropped their price target on Sweetgreen from $8.00 to $5.00 and set a "hold" rating on the stock in a research note on Friday. Citigroup dropped their price objective on shares of Sweetgreen from $10.00 to $8.00 and set a "buy" rating on the stock in a research report on Friday. Royal Bank Of Canada cut their target price on shares of Sweetgreen from $7.00 to $6.50 and set an "outperform" rating for the company in a research note on Friday. Oppenheimer reduced their target price on shares of Sweetgreen from $10.00 to $8.50 and set an "outperform" rating for the company in a report on Friday. Finally, UBS Group reiterated a "buy" rating on shares of Sweetgreen in a research note on Friday. Four equities research analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and three have given a Sell rating to the company's stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Hold" and a consensus target price of $7.19.

Sweetgreen Stock Down 8.2%

Shares of NYSE SG opened at $5.39 on Friday. The business's 50 day moving average price is $7.66 and its two-hundred day moving average price is $6.85. The company has a market cap of $640.49 million, a PE ratio of 53.91 and a beta of 2.19. Sweetgreen has a twelve month low of $4.49 and a twelve month high of $10.63.

Sweetgreen (NYSE:SG - Get Free Report) last released its quarterly earnings data on Thursday, August 6th. The company reported ($0.22) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.13) by ($0.09). Sweetgreen had a net margin of 2.01% and a negative return on equity of 34.03%. The business had revenue of $192.66 million during the quarter, compared to analyst estimates of $194.50 million. During the same period in the previous year, the business earned ($0.20) earnings per share. The business's quarterly revenue was up 3.8% on a year-over-year basis. As a group, research analysts anticipate that Sweetgreen will post -0.52 EPS for the current fiscal year.

Institutional Investors Weigh In On Sweetgreen

A number of hedge funds have recently made changes to their positions in the stock. Royal Bank of Canada lifted its stake in Sweetgreen by 22.4% in the 1st quarter. Royal Bank of Canada now owns 291,477 shares of the company's stock valued at $7,292,000 after purchasing an additional 53,427 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its stake in shares of Sweetgreen by 6.2% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 60,572 shares of the company's stock worth $1,516,000 after buying an additional 3,553 shares during the last quarter. Prudential Financial Inc. acquired a new position in shares of Sweetgreen during the second quarter worth $197,000. Qube Research & Technologies Ltd acquired a new position in shares of Sweetgreen during the second quarter worth $538,000. Finally, Frontier Capital Management Co. LLC lifted its stake in shares of Sweetgreen by 121.7% in the 2nd quarter. Frontier Capital Management Co. LLC now owns 680,255 shares of the company's stock valued at $10,122,000 after acquiring an additional 373,350 shares during the last quarter. 95.75% of the stock is currently owned by institutional investors and hedge funds.

Sweetgreen News Summary

Here are the key news stories impacting Sweetgreen this week:

• Positive Sentiment: Second-quarter revenue increased 3.8% year over year to $192.66 million, indicating continued sales growth despite the challenging environment. Oppenheimer maintained an “outperform” rating, although it reduced its price target from $10 to $8.50. Oppenheimer lowers Sweetgreen price target
• Neutral Sentiment: Sweetgreen said it has not been implicated in the ongoing cyclospora outbreak, but consumer concerns about fresh produce are affecting traffic. The company removed jalapeños from its offerings amid the broader food-safety concerns. Sweetgreen cuts full-year outlook as cyclospora fears weigh on sales
• Negative Sentiment: Sweetgreen reported a second-quarter loss of $0.22 per share, wider than the $0.13 loss analysts expected and worse than the $0.20 loss a year earlier. Revenue also fell slightly short of estimates. Sweetgreen reports second-quarter loss and misses revenue estimates
• Negative Sentiment: Same-store sales declined 6.2% in the quarter, marking the chain’s sixth consecutive comparable-sales decline. Management now expects full-year same-store sales to fall 7%–8%, reflecting weaker customer demand linked to cyclospora fears. Sweetgreen shares slide as cyclosporiasis fears prompt forecast cut
• Negative Sentiment: Analysts lowered their valuations following the earnings release: Wells Fargo cut its target from $7 to $6, while TD Cowen reduced its target from $8 to $5 and assigned a “hold” rating. Analysts lower Sweetgreen price targets

Sweetgreen Company Profile

Sweetgreen, Inc is a fast-casual restaurant chain specializing in salads, grain bowls and warm bowls that emphasize fresh, locally sourced ingredients. Since its founding in 2007 by Jonathan Neman, Nicolas Jammet and Nathaniel Ru, Sweetgreen has focused on sustainable agriculture, working with regional farmers across the United States to provide seasonal produce and promote environmentally responsible sourcing practices. The company's menu features a variety of plant-forward options, including custom-build salads, chef-curated bowls and limited-time offerings that reflect changing harvests.

Sweetgreen operates a technology-driven service model that combines in-store experiences with digital ordering through its mobile app and website.

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