CFRA lowers CAVA Group stock price target to $120 on slower growth

CAVA Group Inc. (NYSE:CAVA) has experienced multiple analyst price target reductions following its Q2 2025 earnings, primarily driven by concerns over decelerating comparable store sales growth, a modest revenue miss, and the maturation trajectory of new locations amid softer consumer spending. While CFRA lowered its target to $120 from $148, it maintained a "Strong Buy" rating citing long-term potential; however, other firms like BofA, Piper Sandler, Bernstein SocGen, TD Cowen, and UBS also cut targets, with some expressing deeper concerns about new store performance and overall sales momentum, indicating a cautious near-term outlook despite some underlying operational strengths.

Analysis

CAVA Group is facing a consensus of analyst caution, evidenced by a series of price target and earnings per share reductions from firms including CFRA, BofA, Piper Sandler, and UBS. The primary driver for this sentiment shift is a significant deceleration in growth, highlighted by a second-quarter same-store sales increase of just 2.1%, which fell well short of the 6.0% consensus expectation, and a modest revenue miss of $280.6 million versus the anticipated $283.6 million. Concerns are further compounded by the performance of new units, with some analysts noting negative same-store sales growth in new locations and questioning their maturation trajectory amid a broader industry headwind of softer consumer spending. Despite this, CFRA maintains a 'Strong Buy' rating, contrasting the near-term sales slowdown with the company's long-term potential, strong execution on store expansion (up 16.7% in Q2), and notable operational efficiencies that have kept food costs flat against inflation.

Key Decisions for Investors

• Investors should closely monitor CAVA's upcoming same-store sales growth figures, paying particular attention to the performance trajectory of new locations as this is the primary driver of recent analyst downgrades.
• The divergence between the cautious consensus view and CFRA's 'Strong Buy' rating requires investors to weigh the near-term risk of decelerating sales against the company's long-term expansion strategy and operational strengths.
• Given the lowered EPS estimates for 2025 (to $0.65) and 2026 (to $0.91), investors should reassess their valuation models to reflect the more conservative near-term growth outlook presented by the majority of analysts.