Benchmark has initiated coverage of CAVA Group with a Buy recommendation and set a price target of $80, citing the company’s leadership in the Mediterranean fast-casual category and what it sees as substantial runway for unit growth.
The research note notes CAVA operates more than 450 restaurants across 29 U.S. states and employs an economic model that supports annual unit growth above 15%. Benchmark’s analysis anticipates the chain reaching at least 1,000 domestic locations by 2032, with room for additional expansion over time.
Shares of the company traded lower on the announcement, down more than 2% in Thursday trading. Benchmark attributed the favorable outlook in part to rising consumer demand for Mediterranean cuisine, which it says is benefitting from a broader preference for fresh, health-focused food choices. That demand dynamic, the firm argues, should support sales even in a mixed consumer spending environment.
Benchmark highlighted CAVA’s national brand presence and improving unit economics for new openings as key enablers of continued expansion. According to the note, newly opened restaurants produce average unit volumes above $3 million and generate restaurant-level operating margins of roughly 24%, metrics that Benchmark views as consistent with ongoing store development.
The research house expects unit growth of about 18% in fiscal 2025 and sees visibility for sustained annual growth above 15% over the longer term. It also flagged a set of company-specific initiatives that could bolster traffic and same-store sales, including a redesigned loyalty program, planned menu additions such as a salmon offering targeted for 2026, and a larger push into catering to create an incremental revenue stream.
On valuation, Benchmark applied a 38x enterprise value to adjusted EBITDA multiple to its fiscal 2027 adjusted EBITDA estimate of $235 million. The firm said CAVA’s growth profile and profitability justify a premium multiple relative to other restaurant operators.
Overall, Benchmark’s initiation emphasizes a combination of category tailwinds, attractive unit-level economics and strategic initiatives that together form the basis for its Buy rating and $80 target.
Key takeaways
- CAVA operates more than 450 restaurants in 29 states and could reach at least 1,000 U.S. locations by 2032, according to Benchmark.
- New units generate average unit volumes above $3 million and approximately 24% restaurant-level operating margins.
- Company initiatives - revamped loyalty, new menu items including salmon planned for 2026, and expansion of catering - may support traffic and sales.
Valuation and outlook
Benchmark values the shares using a 38x EV/adjusted EBITDA multiple applied to a fiscal 2027 adjusted EBITDA estimate of $235 million, reflecting a premium stance due to expected growth and profitability.