Cava Analyst Says Stock Viewed As Pricy But Worth It

KeyBanc Capital Markets initiated coverage on CAVA Group, Inc. (NYSE:CAVA), also known as Cava Grill, a Mediterranean fast-casual restaurant chain with locations across the U.S.

The analyst Christopher Carril writes, “We believe CAVA has the potential to define the category and bring Mediterranean to new markets across the country.”

The analyst views the “Mediterranean” fast food/fast casual category as still in infancy.

Also Read: CAVA’s Traffic-Driven Growth, Price Discipline Is Better Than Broader Market: Analyst

KeyBanc notes that CAVA’s brand awareness remains relatively low, at just over 50%, compared to the 90%+ awareness of large national fast food chains. However, CAVA’s unaided brand awareness has increased by more than six percentage points since it went public two years ago.

The good news for CAVA is that it holds a strong position in its category and doesn’t have to go head-to-head with the big national chains.

KeyBanc initiated with an Overweight rating and a price forecast of $100.

“Our Overweight rating is supported by our view that CAVA’s stock remains undervalued relative to our fundamental and earnings growth outlooks, which are supported by best-in-class unit growth, strong SSS growth, and margin upside opportunity,” the analyst wrote in an investor note on Tuesday.

Analyst Christopher Carril notes that the fast-casual restaurant sector has experienced an uneven performance, primarily driven by the competitiveness of a few major brands against national fast-food chains.

However, Keybanc writes that up-and-coming brands like CAVA have the potential to grow by offering creative menu options, building stronger brand recognition, and continuing to deliver good value compared to fast food and casual dining rivals.

CAVA stock is currently trading at around 115 times KeyBanc’s estimated 2026 earnings per share (EPS) and about 45 times projected 2026 EBITDA, making it one of the most expensive stocks in the sector. However, the analyst says the company has strong pricing power, room to expand, and potential to improve its operations, which could support steady earnings growth or lead to higher future EPS estimates.

Price Action: CAVA stock is up 1.98% at $83.95 at the last check on Wednesday.

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