Analyst Katherine Griffin Upgrades Sweetgreen Shares

Bank of America believes that Sweetgreen is positioned for success, even as people slowly return to the office. Analyst Katherine Griffin has upgraded Sweetgreen shares from neutral to buy. Her reasons for the upgrade include increasing foot traffic, sustained growth in same-store sales, and long-term plans for automation.

Improved Foot Traffic and Long-Term Growth

Griffin stated, “Sustained year-over-year visits growth suggests mobility continues to improve and same-store sales growth can maintain momentum, removing a key concern for the stock.” She also noted that the growth in visits since March indicates improved store execution and guest experience compared to the low levels in 2022. Griffin has raised her price target for Sweetgreen shares to $17 from $9, indicating a potential rally of 30.3%.

Potential for Higher Digital Sales

Sweetgreen’s recently-launched loyalty program has the potential to drive higher digital sales and increase customer engagement through its mobile app, according to the analyst.

Automation and Improved Margins

The company’s plans to automate its kitchens can reduce labor intensity and improve profit margins. Sweetgreen has already opened its first fully automated kitchen and plans to open another one later this year. Griffin believes that automation, combined with investments in labor optimization technology, will contribute to the company’s unit economics and store productivity.

Potential Store Growth

Based on saturation analysis, Griffin sees potential for Sweetgreen to achieve its long-term goal of 1,000 stores. Sweetgreen has high unit-level returns and store productivity, making it an attractive investment. The stock has shown significant growth this year, surging more than 52%. However, its performance over the past 12 months has been flat.

– AsumeTech’s Michael Bloom contributed to this report.