Sweetgreen Inc (NYSE: SG) is one of the hardest-hit stocks this year, now down roughly 70% from its year-to-date high. But Jim Cramer is convinced now is still “not” the time to buy it.
Why is Cramer against owning Sweetgreen?
According to the Mad Money host, the current macro environment is entirely against the American fast casual chain of restaurants that specializes in salads.
The price target cuts on Sweetgreen are relentless, they’re coming endlessly. It’s an unprofitable growth story in an environment where Wall Street has little respect for growth and lows anything that can’t put up positive earnings.
In May, the NYSE-listed company reported a wider-than-expected per-share loss for its fiscal first quarter. It, however, reiterated its guidance for 2022.
Owning ‘SG’ is like fighting the Fed
Sweetgreen went public in November of 2021. Cramer’s remarks come a week after Citigroup slashed its price target on “SG” from $32 a share to $16 a share.
Right now, Wall Street loves earnings, cash flow, dividends. Sweetgreen’s got none of these. You’re fighting the Fed and the tape if you try to bottom fish in this one, and that’s a recipe for portfolio destruction.
Cramer has been recommending avoiding the stock since December. He warned a recession or resurgence of COVID-19 could mean more bad news for Sweetgreen Inc.
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