### Cava's Higher Projections Propel Stock Surge Despite Chipotle's New Investment

Cava, the Mediterranean fast-casual restaurant chain, announced an upgraded forecast for its full-year adjusted EBITDA on Tuesday, aiming for $121 million-$126 million, up from the previously expected $109 million-$114 million. The company also increased projections for same-store sales and new restaurant openings.

Prior to the third-quarter report, Wall Street had predicted Cava would achieve a full-year adjusted EBITDA of $116.7 million, marking a significant 58% growth from 2023, based on data from FactSet. Following this optimistic forecast, Cava's stock experienced a 13% rise in after-hours trading on Tuesday. Earlier that day, the stock had declined by 1.8% in regular sessions, despite hitting a record high of 151.56 on Monday. Cava's stock showed considerable strength leading up to the earnings report, staying well above long-term support levels.

Having nearly doubled in value since an early February breakout and more than tripled since a July 2023 breakout from its IPO base, Cava’s impressive rise has caught investors' attention. However, MarketSurge noted that the rapid growth has left the stock without a new buy point for now.

Cava demonstrated a 10% increase in traffic in the second quarter, defying industry trends. The stock has soared 237% year to date, significantly outpacing its competitors. A notable event for the market was Chipotle Mexican Grill's recent investment in Brassica, a rival Mediterranean fast-casual restaurant chain. This move has been closely watched by analysts and investors.

On Tuesday, shares of another competitor, Sweetgreen, saw some volatility, trading just above a buy point. Meanwhile, Chipotle's stock continued to climb, nearing a 61.25 early entry point from a handle.

Sweetgreen also reported positive news last Thursday by raising its full-year guidance after narrowing its Q3 losses. However, the company's revenue growth slowed to 13% for the third consecutive quarter.

The announcement of Chipotle's minority stake in Brassica, which currently operates only six locations, initially caused a dip in Cava’s stock. Nevertheless, Cava quickly rebounded to new highs. Citi analysts have expressed concerns that Chipotle's investment could put short-term pressure on Cava’s stock due to its high valuation, though they indicated it might be too early to fully gauge the impact.