Jim Cramer on CAVA: “I Think You Gotta Buy the Stock at $62”

CAVA Group, Inc. (NYSE:CAVA) is one of the stocks Jim Cramer recently provided insights on. A caller highlighted that Cramer mentioned the company’s strong growth potential in How to Make Money in Any Market and asked about the stock. In response, Cramer said:

“I sure do. I put CAVA in the magic circle. I think you gotta buy the stock at $62. It’s down 44%. I picked it, it was going down when I picked it for the book, and I just said there’s going to be someone that’s going to come out of the scrum and be like maybe the next, you know, Chipotle from before the decline. I think it’s going to be them.”

CAVA Group, Inc. (NYSE:CAVA) operates a restaurant chain under the CAVA brand and sells dips, spreads, and dressings through grocery retailers. Cramer highlighted the company during the August 13 episode and said:

“Brett Schulman, who’s a very perceptive man, the CEO of CAVA said, ‘We have a fluid… macroeconomic climate.’ He told Restaurant Business, which is an excellent trade publication, that the macro climate was like a fog, a fog that the consumer’s trying to find her way through… He goes on to say, ‘I think the consumer is less firm-footed, less ebullient than they were last year… To me, it’s pretty clear what’s going on. CAVA and Sweetgreen have to lower their prices or give us a couple of much lower-priced dishes if they want to turn things around. For now, they’re pricing themselves out of this American market. I get why they’re reluctant to cut prices. What business wants to lower margins?…

Now of these two problem children, Sweetgreen and CAVA, I think CAVA is in much better shape. It has a better balance sheet. It means CAVA can afford to take its medicine, cut prices to bring the customer back. I think they will do it, which is why, after all this, call me a buyer of CAVA. There’s nothing wrong with taking the medicine…

The problem is, unlike McDonald’s, they’re either maybe too proud or too obtuse, I don’t know, to realize that the consumer’s gotten serious about avoiding high-priced foods, including theirs, even though the food is fresh and good.”

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Disclosure: None. This article is originally published at Insider Monkey.