Why Sweetgreen Stock Dived by 10% This Week

Core Viewpoint - Sweetgreen's stock experienced a decline of over 10% following a price target cut by Morgan Stanley analyst Brian Harbour, reflecting broader concerns about the U.S. restaurant industry's growth prospects [1][2][3] Company Summary - Morgan Stanley reduced Sweetgreen's price target from $32 to$28 per share while maintaining an equal weight recommendation, indicating a hold stance on the stock [2] - The decline in price target is attributed to Harbour's cautious outlook on the U.S. restaurant industry, expecting growth to be less than 5% in 2024, compared to a 4% increase in the previous year [3] - Sweetgreen's stock had a remarkable performance in 2024, more than tripling in value, driven by excitement around its Infinite Kitchen model, which focuses on automating salad preparation [4] Industry Summary - The overall sentiment in the restaurant sector appears cautious, with analysts predicting a sluggish rebound for the industry [3] - Sweetgreen is heavily investing in its Infinite Kitchen initiative, which has seen a rapid increase in the number of kitchens equipped with robotic salad chefs, growing from two to five within a short period [5] - The automation initiative is expected to significantly reduce labor costs, making it a noteworthy development for the company's future [6]