When they call your restaurant “the next Chipotle,” you know you’ve got a potential winner—or a potential disaster—on your hands. That’s just what happened with Cava Group (NYSE:CAVA) as investors sent it spiking over 11% in Monday’s trading. Analyst reports are starting to come in on Cava, and the news is looking overwhelmingly good. It’s also an excellent explanation of why Cava shares have already doubled since their IPO back in June, as analysts increasingly praise the offerings at Cava. Stifel, for example, called particular attention to the “authentic ethnic cuisine” offered at Cava and that its Mediterranean focus offers “broad appeal” with a customer base in multiple age ranges, genders, and income levels.
Further, Jefferies put coverage out itself, calling Cava’s operation a “scalable model” with an “attractive” runway. Ultimately, Jefferies noted, the total market available to it could be on par with Chipotle (NYSE:CMG) in the long term. While some might be concerned about economic downturns putting at least a temporary kibosh on people’s dining out, the rapid expansion rate of Cava seems to be counteracting this trend thanks to its diversification into a range of physical markets.
The affection for Cava stock is almost universal on Wall Street. With six Buy ratings and two Holds, Cava is currently rated a Strong Buy by analysts. However, with its average price target of $45.86 per share, that huge run-up has cost Cava investors most of the upside potential, which is now down to 4.41%.
