Shares of mediterranean fast-casual restaurant chain CAVA (NYSE:CAVA) fell 6.3% in the afternoon session after analysts at William Blair lowered their earnings per share (EPS) estimates for the company's upcoming second quarter. The firm reduced its forecast for CAVA's second-quarter earnings to $0.13 per share from a previous estimate of $0.14. This revision signaled expectations of lower profitability and added to investor concerns regarding the stock's high valuation. CAVA traded at a forward price-to-earnings (P/E) ratio of over 156, a significant premium compared to its industry's average of about 21. Such a high valuation often indicated that investors expected strong growth, making the stock particularly sensitive to negative revisions like the one from William Blair.
CAVA (NYSE: CAVA), the category-defining Mediterranean fast-casual restaurant brand, today opened its first location in Michigan, located at 43450 Ford Road, Canton, MI 48187. CAVA Canton is a 3,850-square-foot location with a dining room and digital order pick-up and delivery. Daily operating hours are 10:45 a.m. - 10 p.m. The brand has plans to expand its Michigan footprint later this year.
Shares of mediterranean fast-casual restaurant chain CAVA (NYSE:CAVA) fell 3.2% in the morning session after Morgan Stanley lowered its price target on the stock and another firm initiated coverage with a neutral rating. Morgan Stanley reduced its price target on the Mediterranean fast-casual chain to $107 from $115, although it maintained its "equal weight" rating on the shares. This suggests that while the firm sees the stock as fairly valued, its future price appreciation may be more limited than previously thought.
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CAVA Group's strong fundamentals, expansion plan, and strategic investments suggest the fast-casual brand's long-term growth story is gaining momentum.
KeyBanc initiates its coverage on Cava Group with an Overweight rating and $100 price target as the Mediterranean chain grows to be the leading brand in the segment.
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