Telsey raises Cava stock price target to $88 on unit growth outlook

Telsey Advisory Group raised its price target on Cava Group Inc (NYSE:CAVA) to $88 from $85 on February 25, 2026, citing the Mediterranean restaurant chain's strong unit growth outlook and ambitious expansion plans to open more than 1,000 restaurants by 2032. The firm maintained its Outperform rating on the shares, emphasizing that the expansion target is likely conservative and could be revised higher as Cava continues its aggressive growth trajectory. The positive outlook is supported by Cava's current restaurant count of 439 locations and the company's demonstrated ability to maintain healthy unit economics with average unit volumes of approximately $3 million. Telsey highlighted several factors contributing to this optimism, including menu innovation, a tiered loyalty program, remodels under Project Soul, and improved technology initiatives that are expected to drive continued growth in average unit volumes. The firm also noted Cava's strong company culture focused on food passion, talent development, customer centricity, and hospitality as key differentiators in the competitive restaurant landscape. Cava's financial performance further supports this optimistic outlook, with revenue growing 24% over the last twelve months to $1.13 billion and maintaining a gross profit margin of 38%. The company has been profitable with earnings of $1.16 per share over this period. The new $88 price target is based on an EV/EBITDA multiple of approximately 55 times Telsey's raised 2026 EBITDA estimate of $182 million. Currently, Cava trades at an EV/EBITDA of 60 times, reflecting premium valuation expectations in the market. Recent quarterly results have reinforced this positive sentiment, with Cava reporting fourth-quarter results that exceeded analyst expectations. The company achieved adjusted earnings per share of $0.04, surpassing the analyst consensus estimate of $0.00, while quarterly revenue reached $275.0 million, significantly higher than the $228.3 million projected by analysts and marking a 21.2% increase from the previous year. This performance contributed to Cava's annual revenue surpassing $1 billion for the first time in the company's history.