Bank of America analysts initiated coverage for Cava Group (CAVA) on Monday with a positive "buy" recommendation for the fast-casual chain.

The analysts set a target price of $112 for Cava, which is approximately 30% higher than its closing share price on Monday. Another source, Visible Alpha, has an average target of $124 for the stock.

Even though Cava shares have faced challenges in 2025, losing over 20% of their value so far due to concerns about consumer health, Bank of America suggests that this dip could present a good opportunity for investors. The bank believes that Cava is well-positioned for growth as it attracts new customers, enhances its appeal to existing clientele, and expands its store footprint.

The analysts mentioned that new advertising efforts and menu additions, such as steak and garlic pita chips, could draw in more customers. Improvements to the loyalty program may also encourage current customers to visit more frequently.

With almost 370 locations and plans to extend to 1,000 stores, Cava's expansion strategy was labeled as "moderate" by Bank of America, which estimated the potential for 2,200 locations. The bank expressed confidence in Cava's ability to boost sales at existing stores and provide returns to shareholders.

Bank of America's positive comments follow a recent upgrade by JPMorgan analysts and the announcement of Cava's inclusion in the S&P MidCap 400 index by S&P Global.

Cava's shares closed at $86.41 on Monday, reflecting a 0.7% increase. Despite a slow start in 2025, the stock has grown by approximately 25% over the past year.