This restaurant chain specializing in salads is primed to surge nearly 50%, Oppenheimer says

Oppenheimer thinks Sweetgreen is poised for a breakout. The firm reiterated an outperform rating on the restaurant chain stock and listed it as a top pick. Oppenheimer’s $34 per share price target implies nearly 50% upside from Monday’s $22.74 close. “We believe the model is in the early innings of a powerful earnings revision cycle,” analyst Brian Bittner wrote on Monday. “Our work also suggests sales/margins in 2024E hold compelling catalysts against consensus, while the rollout of Infinite Kitchens adds a transformational lever starting in 2025 and beyond.” Sweetgreen’s automated service project, Infinite Kitchen, opened its first location in May 2023. The company plans to rollout the framework nationwide to slash labor costs. Bittner’s note comes ahead of Sweetgreen’s first-quarter report, slated for Thursday. Sweetgreen will also report first-quarter results on Thursday. Analysts polled by FactSet forecast a loss of 18 cents per share on revenue of $152 million. The analyst, however, sees Sweetgreen reporting a smaller-than-expected thanks to strong margins. “Valuation and speed bumps to mgmt.’s sales forecasts had kept us from being more actionable,” continued. However, “our work suggests now is the time to get aggressive as the model transitions to sustainable EBITDA profitability starting in 2024.” Sweetgreen has been on fire this year, gaining more than 100%. The bulk of those gains have come since March — when the company issued strong full-year guidance. SG YTD mountain Sweetgreen year to date