Citi analysts raised their price target for CAVA Group Inc (NYSE:CAVA) to $115 from $93, while maintaining a Neutral rating following the company’s announced better-than-expected Q2 earnings, which resulted in a stock price surge of more than 21% intra-day today.

The analysts highlighted that CAVA is benefiting from its unique category, which is difficult to replicate at home, alongside strong brand awareness, effective social and digital marketing, and solid execution. The company delivered strong same-store sales (SSS) growth and reported its second consecutive quarter of positive free cash flow. Despite the strong fundamentals, the analysts expressed caution due to the company's high valuation, which leaves little room for error, particularly in a potentially challenging market environment. Consequently, Citi remains on the sidelines for now.