One of the most intriguing initial public offerings (IPOs) in recent memory that has proven to be worth watching is that of Cava (NYSE:CAVA). Today, CAVA stock trades around the $44 level. However, less than one month ago, the company went public at only $22 per share.
Perhaps the company wanted to underprice its offering to generate buzz around its business model and entice longer-term holders. Or, maybe the timing of the offering (when there were very few new issuances taking place) compelled a more cautious approach from the company.
Whatever the case, it’s clear that investors believe CAVA stock could have big upside. As it happens, most of the analysts covering shares tend to agree.
Let’s dive into what five top analysts think of Cava Group’s potential. It’s worth noting that analysts from JPMorgan, Stifel, William Blair and Jefferies all took place in the underwriting of Cava’s IPO.
5 Analysts Weigh In on CAVA Stock
- JPMorgan: JPM initiated coverage of CAVA stock with an “overweight” rating and a $45 price target. Analysts noted that a large addressable market, strong brand appeal to a broad customer base and the company’s leadership team are reasons for continued upside.
- Stifel: Analysts led by Chris O’Cull assigned a “buy” rating for CAVA stock with a $48 price target. Impressive unit-level returns and long-term growth potential, along with strong financials (no funded debt and $340 million of cash on hand) led to this rating.
- William Blair: Analyst Sharon Zackfia initiated coverage on CAVA with an “overweight” rating. The company’s menu focus and its broad appeal led to expectations from the analyst that “high-single-digit to low-double-digit” growth could be attainable over the next decade.
- Jefferies: The bank also issued a “buy” rating and a $48 price target on shares, citing similar catalysts as other analysts.
- Morgan Stanley: Finally, Morgan Stanley issued an “equal weight” rating for CAVA stock and a $43 price target, appearing to view the stock as a “show me” story. Analysts believe that CAVA may be fully priced and investors should “look at valuation carefully.”
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
