JPMorgan has downgraded Cava Group Inc. (CAVA) from Overweight to Neutral, citing valuation concerns. The investment bank noted that Cava's shares have become too expensive, with a price target of $77, compared to the current stock price of $92.55. JPMorgan highlighted that Cava's valuation per store, estimated at approximately $33 million based on its 328 stores, is unprecedented in the industry. The bank also pointed out that Cava's average unit volumes (AUVs) are $2.6 million, while construction costs per store exceed $1.5 million. Despite the downgrade, JPMorgan remains constructive on Cava's clean business model but prefers Chipotle (CMG), which has a lower valuation per store of around $25 million. Following the downgrade, Cava's stock fell by 5%.
$CAVA -5% JPMorgan downgrades Cava on valuation, prefers Chipotle
JP Morgan downgrading $CAVA on valuation...with ~$33mm EV/store despite current AUVs of $2.6mm, hitting a record relative industry high vs $CMG currently at ~$25mm
$CAVA JPMorgan downgrades Cava to neutral from overweight JPMorgan downgraded the stock mainly on valuation. “We move CAVA to a valuation-driven Neutral while we remain constructive on the clean business model.”
JPMORGAN: $CAVA "has landed an impressive ~$33m valuation per store on its 328 current store base. .. this level of valuation is unprecedented in the group. Stock at $92.55 sits too far above our $77 price target for us to hold onto an [overweight] .." Cuts to Neutral
JPMorgan Downgrades $CAVA to Neutral from Overweight with PT of $77, citing the shares 'have gotten too expensive.' “Considering average unit volumes (AUVs) of $2.6M and construction costs per store of over $1.5M, this level of valuation is unprecedented in the group,” “We…