Stifel analyst Chris O'Cull lowered the firm's price target on First Watch Restaurant to $14 from $15 and keeps a Hold rating on the shares. The firm notes the company delivered a solid operational quarter, yet shares continue to struggle as investors focus on the 2% decline in traffic. While stores achieved a strong 18.5% restaurant-level margin, the outlook for the second half of 2026 hinges on reversing negative traffic trends. Without meaningful traffic improvement, the company will likely need to raise menu prices to post positive second half of the year comparable sales, a difficult maneuver given currently weak consumer sentiment and the risk that further hikes could exacerbate traffic declines, Stifel adds.
