Sweetgreen Expands with Infinite Kitchen Amid Mixed Analyst Sentiment

Sweetgreen, a fast-casual restaurant chain, is expanding its restaurant count with its Infinite Kitchen technology and aims to be carbon neutral by 2027. Despite a 6.65% Q2 sales drop, Morgan Stanley lowered its price target from $22 to $17 while Barclays raised its target from $16 to $17. Mixed analyst sentiment surrounds the stock, with 27 hedge funds owning a stake in the company.

Sweetgreen, Inc. (NYSE: SG), a fast-casual restaurant chain, continues to face a challenging financial landscape. Despite the company's ambitious goals, such as expanding its restaurant count with Infinite Kitchen technology and aiming to be carbon neutral by 2027, recent financial performance and analyst sentiment have highlighted the company's struggles. Morgan Stanley recently lowered its price target from $22 to $17, while Barclays raised its target from $16 to $17, reflecting a mixed sentiment among analysts.

Sweetgreen's second-quarter sales dropped by 6.65%, according to Investing.com [1]. The company's shares have fallen over 50% in the past year, currently trading at $13.34. UBS Group, one of the major analysts covering Sweetgreen, has lowered its price target to $19.00 from $30.00, reflecting broader segment valuation pressures and persistent macroeconomic headwinds affecting the category and Sweetgreen's performance [2]. UBS has also reduced its 2025-27 EBITDA estimates by 16-20% for the company.

Several other analysts have adjusted their price targets and ratings. TD Securities reiterated a "hold" rating with a $15.00 price target, while Oppenheimer dropped its target price from $35.00 to $29.00 with an "outperform" rating [2]. Morgan Stanley, despite the price target reduction, maintained a "neutral" rating, while Barclays raised its target to $17.00 with an "equal weight" rating [2]. Eight analysts have rated the stock with a hold rating, and six have issued a buy rating, resulting in an average rating of "Hold" and an average target price of $22.46 [2].

Sweetgreen's financial performance has been impacted by various factors, including sales pressure, macroeconomic conditions, and potential store closures. The company's current EBITDA stands at -$35.3 million, with a moderate debt level and a current ratio of 1.97x [1]. Despite these challenges, UBS believes that Sweetgreen maintains sales drivers to support improved trends in coming quarters, citing leading development trajectory, kitchen automation, menu innovation, and loyalty program revamp as factors supporting solid same-store sales and EBITDA growth over the coming years [1].

Institutional investors have also shown interest in Sweetgreen, with 27 hedge funds owning a stake in the company. Baillie Gifford & Co., FMR LLC, Vanguard Group Inc., Wellington Management Group LLP, and Invesco Ltd. have all increased their stakes in the company during the past quarters [2]. This indicates a level of confidence in the company's long-term prospects despite the current challenges.

Sweetgreen's stock remains volatile, with a 12-month low of $11.86 and a 12-month high of $45.12. The company's market capitalization stands at $1.53 billion, with a P/E ratio of -16.95 and a beta of 2.06 [2]. The stock has a 50-day moving average price of $13.58 and a 200-day moving average price of $20.25.

In conclusion, Sweetgreen faces significant challenges in the current financial environment. However, the company's strategic initiatives and strong institutional backing suggest that it may be able to navigate these challenges and achieve long-term growth. Investors should closely monitor Sweetgreen's financial performance and analyst sentiment as the company works towards its ambitious goals.

References:
[1] https://www.investing.com/news/analyst-ratings/ubs-lowers-sweetgreen-stock-price-target-to-19-on-macro-headwinds-93CH-4160464
[2] https://www.marketbeat.com/instant-alerts/ubs-group-has-lowered-expectations-for-sweetgreen-nysesg-stock-price-2025-07-30/