What Happened?
Shares of mediterranean fast-casual restaurant chain CAVA (NYSE:CAVA) fell 3.2% in the morning session after Morgan Stanley lowered its price target on the stock and another firm initiated coverage with a neutral rating. Morgan Stanley reduced its price target on the Mediterranean fast-casual chain to $107 from $115, although it maintained its "equal weight" rating on the shares. This suggests that while the firm sees the stock as fairly valued, its future price appreciation may be more limited than previously thought.
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What Is The Market Telling Us
CAVA’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
CAVA is down 22.2% since the beginning of the year, and at $89.66 per share, it is trading 40.6% below its 52-week high of $150.88 from December 2024. Investors who bought $1,000 worth of CAVA’s shares at the IPO in June 2023 would now be looking at an investment worth $2,048.
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