Sweetgreen stock and Dutch Bros carved lower early Monday after receiving a downgrade from analysts. Elsewhere, analysts initiated coverage of cold storage warehouse operator Lineage.
Piper Sandler early Monday downgraded Sweetgreen to neutral from overweight but raised its price target on the shares, The Fly reported. Piper said it tempered expectations on the fast-casual restaurant sector coming out of earnings season.
Sweetgreen's Infinite Kitchen technology, which operates their automated kitchens, "remains incredibly encouraging, and is arguably still underappreciated by many in the investment community," Piper Sandler wrote. However, Piper believes the stock's risk vs. reward scenario has become more balanced at current share prices. Sweetgreen's thesis is on track, Piper Sandler wrote, but that is now more reflected in its valuation. The firm lifted its price target on Sweetgreen to 39 from 33.
Sweetgreen on Aug. 9 missed earnings views with a wider-than-expected loss per share but cleared revenue forecasts with a 21% sales jump.
Meanwhile, Piper Sandler also cut its price target on Dutch Bros on Monday as part of its fast-casual restaurant review and downgraded the drive-through coffee chain. The firm says Dutch Bros has a "higher-risk, higher-reward situation" given the industry segment it participates in, as well as its balance sheet positioning. Given recent restaurant industry traffic and promotional environment trends, Piper views Dutch Bros' risk-reward trade-off as more balanced at current share levels. The firm downgraded BROS stock to neutral from overweight and cut its price target to 36 from 41.
One Restaurant Initiated
Separately, Piper Sandler on Monday was among the various firms that initiated coverage of cold storage warehouse company Lineage. Lineage bills itself as the world's largest temperature-controlled real estate investment trust. Piper noted that Lineage management's focus on people, culture and innovation is enticing to cold storage sellers, and the company's self-developed technology allows customers to move more product.
Although it is only 15 years old, Lineage has "upended the cold storage industry," Piper wrote. The firm said that Lineage has automated many functions, which has increased efficiency, reduced waste and allowed customers more insight on the product system. Piper Sandler started coverage on LINE stock with an overweight rating and 102 price target on the shares.
Sweetgreen Stock Action
SG stock tumbled 6.8% Monday. Sweetgreen closed Friday above a 36.72 buy point for a cup base after passing that entry on Thursday.
Still, Sweetgreen has vaulted 208% so far this year.
Dutch Bros shares weakened 3.9% Monday, to drop back below their 200-day moving average. BROS stock rebounded above that technical level on Thursday.
Dutch Bros is down about 1% in 2024 after tumbling from early July highs.
LINE stock added 4.4% Monday. Lineage finished Monday at 87.68, up 12.4% since going public at $78 per share on July 25.
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