Sweetgreen sinks as Wall Street says customers are (finally) cutting back on pricey salads
JPMorgan downgraded the stock to “neutral” from “overweight” and slashed its price target.
Sweetgreen shares were down 6% Tuesday morning after JPMorgan slashed its rating and price target for the popular salad chain. Analysts now have Sweetgreen at “neutral” from “overweight” (or “buy”) and cut its price target to $25 from $32.
“We see underlying demand trends continue to soften, with further impact moving into higher-income demographics,” analysts said in a note. Sweetgreen’s salads range from $13 to $17 — up to 30% higher than competitors. So far, its higher-income customer base has helped offset slowdown as the rest of consumers start to cut back on takeout. Last week, McDonald’s reported a 3.6% decline in US same-store sales — the steepest drop since 2020.
Analysts noted that for those still looking to eat out, customers now have a multitude of choices and are able to trade down, switch to grocery stores, or lean into meal-prepped work lunches.
Sweetgreen shares are now down about 43% year to date, and the company is set to report earnings this Thursday.
