CAVA Group (NYSE:CAVA) shares were upgraded to Buy by UBS, which cited the Mediterranean fast-casual chain’s same-store sales resilience, unit expansion potential, and an improved risk/reward following a pullback in shares since April.
“CAVA remains a compelling growth story, which is increasingly scarce in the sector in the current environment,” UBS analysts wrote, pointing to differentiated menu offerings, multiple sales catalysts, and healthy new unit returns as key supports for a premium valuation.
UBS models upside to CAVA’s 2026 same-store sales guidance of 4.5% to 6.5%, with traffic-driven momentum holding up despite a difficult macro backdrop. The firm sees potential upside to consensus estimates of approximately 7% same-store sales growth in 2026 and roughly 4% annually from 2027 through 2029.
Drivers include CAVA’s appeal to health-conscious consumers, a pipeline of menu innovation and limited-time offerings, marketing investments to build brand awareness, digital and loyalty program contributions, and operational improvements tied to technology initiatives, labor investments, and the Project Soul new restaurant design rollout. UBS Evidence Lab data was cited as supporting the sustainability of same-store sales momentum at or above the company’s long-term growth algorithm.
The new $90 target implies roughly 38x next-twelve-months EBITDA, up from the prior 36x multiple, reflecting UBS’s expectation of 20%-plus revenue growth and 25%-plus EBITDA growth in the coming years.
UBS modeled 17.5% unit growth in 2026 and a 16% three-year unit CAGR through 2029, underpinned by cash-on-cash returns above 40% at year two, strong new store performance across both newer and existing markets, and significant whitespace. The firm sees potential upside to CAVA’s target of 1,000 units by 2032, supported by growing brand awareness in new markets and investments in developing a pipeline of leaders to support new store operations.
UBS said CAVA’s premium valuation is justified given a clear path to industry-leading EBITDA growth, and that sustained outsized growth, without the overhang concerns affecting select peers, should support a re-rating of shares higher.
