Andrew Charles, an analyst from TD Cowen, maintained the Hold rating on Sweetgreen (SG – Research Report). The associated price target is $15.00.
Andrew Charles has given his Hold rating due to a combination of factors including the company’s performance and market expectations. Sweetgreen’s participation in an improved fourth quarter for the fast-casual sector led to an adjusted EBITDA beat, which was primarily driven by stronger than anticipated same store sales (SSS). In particular, the company’s introduction of Protein Plates has contributed positively, especially in areas such as Texas and the Southeast that previously faced challenges. This product expansion helped Sweetgreen exceed sales estimates and achieve better than expected restaurant margins, despite some cost of goods sold (COGS) pressures related to the new offering.
Moreover, Sweetgreen’s guidance for 2024 adjusted EBITDA is optimistic, with projections that surpass the consensus expectations at the midpoint. The company’s strategic investment in Infinite Kitchens is expected to significantly increase restaurant level margins, especially in high-volume urban locations. While these factors are promising, the Hold rating suggests that there are still uncertainties or limited upside potential that prevent a more bullish stance at this time. This could be due to market conditions, execution risks, or other variables not fully accounted for in the current projections.
In another report released on February 20, Citi also maintained a Hold rating on the stock with a $13.00 price target.
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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.
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