Raymond James starts Cava at Market Perform, awaits better entry point

Raymond James analyst Brian Vaccaro last night initiated coverage of Cava Group with a Market Perform rating and no price target. The firm says its bullish view of the brand’s key points of differentiation and attractive long-term growth opportunity is offset by the stock’s premium valuation to peers. Its discounted cash flow fair value estimate is $31 per share. The analyst recommends investors be patient for a more attractive entry point to potentially materialize, which Raymond James says could occur in the next 3-6 months given the potential for flat/slightly negative year-over-years comps in Q1 of 2024 on very difficult comparisons.