Why Sweetgreen (SG) Stock Is Trading Lower Today

What Happened?

Shares of casual salad chain Sweetgreen (NYSE:SG) fell 2.5% in the morning session after B of A Securities downgraded the stock to "Neutral" from "Buy" and significantly cut its price target. 

The firm's analyst lowered the target price on the shares to $9.50 from a previous $18.00. This substantial reduction indicated a less optimistic outlook on the company's stock performance. The downgrade followed a period where the fast-casual salad chain's stock had already been under pressure. The company faced challenges including a disappointing earnings report in the preceding months, which contributed to negative investor sentiment.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Sweetgreen? Access our full analysis report here.

What Is The Market Telling Us

Sweetgreen’s shares are extremely volatile and have had 58 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 12 days ago when the stock gained 3.1% on the news that the company announced its debut in Arizona with two new restaurant openings. 

The fast-casual chain opened its first Arizona location in Scottsdale, with a second planned for Phoenix in late October. This move marked a milestone in Sweetgreen's nationwide growth and its first entry into the Arizona market. The company's Co-Founder and CEO, Jonathan Neman, noted that Scottsdale and Phoenix had a strong culture of wellness and active living, making it a fitting place to continue the company's mission.

Sweetgreen is down 75.1% since the beginning of the year, and at $7.99 per share, it is trading 81.8% below its 52-week high of $43.97 from November 2024. Investors who bought $1,000 worth of Sweetgreen’s shares at the IPO in November 2021 would now be looking at an investment worth $161.31.

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