CAVA Group, Inc. (NYSE:CAVA) is having a good day. The Mediterranean fast-casual chain reported second-quarter results that beat expectations, and analysts are lining up to explain why the recent food-safety scare might not be the disaster some feared.
Let's start with the numbers. CAVA reported second-quarter revenue of $368.44 million, up 31.3% year over year to $365.43 million, which topped the $360.53 million analyst estimate. Diluted earnings of 19 cents per share also beat the 18-cent estimate. Same-restaurant sales increased 9%, including 5.3% traffic growth. That's the kind of growth most restaurant chains would kill for, especially in this environment.
But here's where it gets interesting: analysts are split on what this means for the stock's valuation. RBC Capital Markets raised its price target, while TD Cowen lowered its target, even though both remain bullish on the underlying business. Let's dig into both.
RBC Says CAVA Is 'Firing On All Cylinders'
RBC Capital Markets analyst Logan Reich reiterated an Outperform rating and raised the price target to $95 from $90. Reich said CAVA's second-quarter results came in ahead of expectations, and quarter-to-date trends are "better than feared."
That's a direct reference to the Cyclospora-related publicity that hit the chain earlier this year. The food-safety issue caused a dip in sales, but Reich notes that same-store sales improved each week following the initial impact and reached the mid-single digits in the latest week. In other words, the recovery is happening faster than investors expected.
The analyst said the food-safety impact appeared less severe than feared. CAVA's 9% same-store sales growth topped RBC's expectations and the Street's 7.4% estimate. Traffic rose 5.3%, and the salmon launch helped drive customer frequency and attract new customers. So the menu innovation is working, too.
RBC also highlighted new-store productivity. New restaurants continue to outperform management's expectations for average unit volumes and margins, while older restaurant vintages are posting strong comparable sales. That suggests CAVA has enough consumer demand to support both greater density in existing markets and expansion into new ones. That's a good problem to have.
RBC also thinks CAVA's decision to maintain its full-year outlook despite 9.4% same-store sales growth in the first half appears conservative. The company maintained its 2026 forecast for 4.5% to 6.5% same-restaurant sales growth and adjusted EBITDA of $181 million to $191 million. So the company is being cautious, but the analysts see room for upside.
TD Cowen Cuts Target, But Still Loves The Stock
TD Cowen took a more cautious view on valuation but remained bullish on CAVA's underlying business. The firm maintained its Buy rating but lowered its price target to $85 from $100. That's a big cut, but it's not because they think the business is deteriorating.
TD Cowen called CAVA a top pick and said investor sentiment had become "too negative." The analyst maintained a 7% same-store sales growth estimate for 2026, which is above CAVA's guidance range. They said the recent Cyclospora publicity caused only a modest disruption, and the pace of the subsequent sales recovery, strong second-quarter performance, and additional sales levers could put CAVA back on a positive estimate-revision path.
TD Cowen noted that CAVA's 9% second-quarter same-store sales growth was the strongest among restaurants reporting during the June-quarter earnings season. That's a nice bragging right. Adjusted EBITDA of $54.7 million also exceeded the firm's $52.4 million estimate.
So why the lower price target? It's not about the operating outlook. TD Cowen maintained its 2026 adjusted EBITDA estimate at $192 million, slightly above the top end of management's guidance. Instead, the firm cited higher interest rates and lower restaurant-industry valuation multiples. That's a macro call, not a company-specific one.
CAVA entered the quarter with 476 restaurants after opening 17 net new locations. The company plans to open 75 to 77 restaurants in 2026 as it pushes into new markets, including Las Vegas in the second half of the year and the San Francisco Bay Area in 2027. So the growth story is intact.
At the time of publication Wednesday, CAVA shares were up 10.71% at $67.32, according to market data. The market seems to agree with the analysts that the food-safety scare is in the rearview mirror.
