Analyst Jon Tower from Citi maintained a Hold rating on Sweetgreen (SG – Research Report) and increased the price target to $13.00 from $12.00.
Jon Tower has given his Hold rating due to a combination of factors that balance Sweetgreen’s long-term potential with near-term uncertainties. Tower recognizes that the market has yet to fully appreciate Sweetgreen’s Infinite Kitchen (IK) opportunity. Furthermore, he acknowledges the company’s promising array of initiatives aimed at driving same-store sales, including menu innovation and revamped loyalty programs. However, he also anticipates that management may remain cautious in their commentary about IK, and he notes that a slow start to the first quarter could lead to a harsh market reaction, especially for a stock trading at a higher multiple. This cautious outlook is tempered by the possibility that if risks related to the first quarter’s performance are mitigated, the IK opportunity could be brought to the forefront of the company’s growth narrative.
In terms of specific inquiries for the upcoming earnings call, Tower is looking for updates on sales and margins for IK units, customer reactions to new menu items, engagement with the revamped loyalty program, and progress on throughput initiatives. The data he cites shows some positive momentum in footfall and app usage, although there has been a return to baseline levels after a spike in the fourth quarter. Adjustments to Sweetgreen’s earnings per share (EPS) estimates are minor, and Tower has slightly increased the target price from $12 to $13—still maintaining a neutral stance with high-risk recognition. This Hold rating reflects the cautious optimism Tower has for Sweetgreen’s strategic initiatives, balanced against the potential volatility of early-stage execution and market response.
See today’s best-performing stocks on TipRanks >>
Based on the recent corporate insider activity of 51 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SG in relation to earlier this year.
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Sweetgreen (SG) Company Description:
Sweetgreen Inc is a next generation restaurant and lifestyle brand that serves healthy food at scale. It is creating plant-forward, seasonal, and earth-friendly meals from fresh ingredients and produce that prioritizes organic, regenerative, and local sourcing.
Read More on SG:
- Sweetgreen Announces New Appointment in Press Release
- Sweetgreen names Rossann Williams as COO
- Wall Street chooses winners in restaurant space for 2024
- Sweetgreen downgraded to Underweight at Morgan Stanley on lagging sales recovery
- Sweetgreen downgraded to Underweight from Equal Weight at Morgan Stanley
