Stonex reiterates Buy rating on Cava stock, $110 price target

Seaport Research initiated coverage on five restaurant chains, rating Wendy's (WEN), Chipotle (CMG), Starbucks (SBUX), and McDonald's (MCD) 'Neutral', while naming CAVA Group (CAVA) 'Buy'. The firm cited weaker restaurant traffic, rising oil prices, and inflation as pressures on the industry. CAVA was highlighted for its growth potential and lower brand awareness, with a $58 price target.

CAVA's Q2 2026 results beat expectations with revenue up 31.3% to $365.4M, but shares fell 8.11% to $50.44. COO Douglas Thompson bought $432,380 in stock amid analyst price target cuts. Restaurant-level margins softened, but growth continues. Forward multiple dropped to 83.55x.

CAVA Group reported Q2 2026 earnings beating expectations, with 17 new restaurants and 9% same-store sales growth. However, higher food, labor, and delivery costs pose challenges. The company maintained its fiscal 2026 outlook and is expanding, including a second St. Louis area location. Analysts note margin pressure as a key risk, with net profit margins at 4.8% compared to 13% last year. The company projects $2.4B revenue and $145.2M earnings by 2029, assuming 20.4% annual revenue growth.

Baird downgraded Chipotle (CMG) to Neutral, cutting its price target to $40, citing slower growth and higher reinvestment needs. Domino's (DPZ) and Black Rock Coffee Bar (BRCB) were also downgraded. Darden (DRI) was upgraded to Outperform with a $250 target. Baird favors Cava (CAVA), Starbucks (SBUX), and others with strong unit economics and growth potential.

Baird downgraded Chipotle (CMG), Domino's (DPZ), and Black Rock Coffee Bar (BRCB) to Neutral, citing slower growth and competitive pressures. It upgraded Darden (DRI) to Outperform, praising its strong fundamentals. Price targets were adjusted for each. Baird also initiated coverage of Brinker (EAT) and Jersey Mike's with Outperform ratings, and named Cava (CAVA), Brinker, Starbucks (SBUX), and Dutch Bros (BROS) as top picks.

CAVA reported Q2 2026 revenue of $365.4M, up 31.3% YoY, driven by new restaurant openings and 9% same-restaurant sales growth. Net income rose 25.3% to $23M, while adjusted EBITDA increased 30% to $54.7M. The company opened 17 new restaurants, bringing the total to 476. Management guided for 75-77 new openings in 2026 and adjusted EBITDA of $181M-$191M. Food safety concerns temporarily impacted traffic, but performance recovered. CEO Schulman highlighted expansion plans and new menu items like P