Guggenheim cuts Cava stock price target on margin pressures
On Wednesday, investment firm Guggenheim lowered its price target for Cava Group Inc's shares from $100 to $95 while retaining a Buy rating. The company's second-quarter 2026 results showcased same-store sales growth of 9.0% and traffic growth exceeding 5%. Adjusted EBITDA amounted to $55 million, slightly below Guggenheim's estimates by $1 million.
Despite impressive revenue growth of nearly 27% over the past year, high EBITDA valuation multiple of 51x and margin pressures due to new salmon protein, wage investments, and delivery fees impacted profit growth. While quarter-to-date trends showed mixed performance in the third quarter, Cava maintained its guidance without changes.
The lowered price target reflects a 50x multiple on 2027 EBITDA at a reduced earnings base. Cava's performance included same-store sales growth of 9.0% surpassing estimates, and adjusted EBITDA of $55 million, outperforming expectations. Analyst reactions were mixed, with KeyBanc lowering its price target, RBC Capital raising it, Mizuho adjusting downward, and Bernstein maintaining an Outperform rating.
The Cyclospora news cycle affected demand for salad and salad-adjacent concepts, leading to Guggenheim's revised estimates. For more detailed analysis, CAVA is included among the 1,400+ US equities covered by InvestingPro's Pro Research Reports.
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