JPMorgan upgrades this fast-casual restaurant stock, says investors should buy it on the dip

Investors should buy the dip on Cava , according to JPMorgan. Analyst John Ivankoe upgraded the Mediterranean fast-casual stock to overweight from neutral. Ivankoe’s $110 price target implies shares can rally 35.8% over Wednesday’s close. “CAVA has significant US white space for expansion from its already multi-market success, is generating [free cash flow] unusually early, and has considerable near-term operational and brand initiatives to drive both sales and profits,” Ivankoe wrote in a Thursday note to clients. “We view the stock as a ‘buy now and own for the long-term.'” Ivankoe said the chain should expand from the 367 units currently operating to far past the 1,000 figure initially set for 2032 when going public. He said the stock could see 2,000 stores in 2037 and 3,500 in 2043. While Cava still has an awareness gap compared with competitors, Ivankoe said the company is working on differentiating its loyalty program. For instance, he said the company offers points for customers to submit delayed digital orders. The analyst also noted that it’s a smart time to pick up the stock, which went public in 2023. Shares have tumbled more than 28% this year, reversing course after surging 162.5% in 2024. “We recommend taking advantage of the significant pullback,” Ivankoe said. CAVA 1M mountain Cava, 1-year Shares popped about 4% before the bell on Thursday. With the upgrade, Ivankoe joined the majority of Wall Street analysts who have a buy rating on Cava, per LSEG.