Stock exchange

Chipotle Mexican Grill Could Hit New All-Time High on Strong Q1 Earnings

US restaurant chain Chipotle Mexican Grill is expected to report its first-quarter earnings of $4.79 per share, which represents year-over-year growth of over 55% from $3.08 per share seen in the same quarter a year ago.

Chipotle Mexican Grill to announce its first-quarter 2021 results on Wednesday, April 21, 2021. The California-based company would post revenue growth of over 20% to around $1.7 billion. According to ZACKS Research, equity analysts on average forecasts full-year sales of $7.24 billion for 2021, with estimates ranging from $7.11 billion to $7.51 billion. For 2022, analysts expect sales to reach $8.12 billion, with estimates ranging from $7.89 billion to $8.40 billion.

Chipotle Mexican Grill’s shares, which surged more than 65% in 2020, rose over 10% so far this year.

Analyst Comments

“Our 1Q comp forecast of 16% (unchanged here) compares to Street 16.8% and guidance of mid-to-high teens with January closer to 11%, weather impacting February and an easier lap in March. Pricing increases are another driver; cauliflower rice was launched early in the quarter, and quesadillas were launched nationally in early March. We model store margins of 20.9% vs Street 21.1% and EPS of $4.84 vs Street $4.80, unchanged here,” noted John Glass, equity analyst at Morgan Stanley.

“Annual comments still not likely to be provided aside from development (already provided at ~200), comp estimates were provided last quarter however for the current quarter. 2Q will lap the most material COVID-19 disruption and we forecast close to +30% SSS accordingly, which obscures some of the impacts of discrete items like new products or stimulus.”

Chipotle Mexican Grill Stock Price Forecast

Twenty-three analysts who offered stock ratings for Chipotle Mexican Grill in the last three months forecast the average price in 12 months of $1,649.95 with a high forecast of $2,000.00 and a low forecast of $1,165.00.

The average price target represents a 7.74% increase from the last price of $1,531.42. Of those 23 analysts, 14 rated “Buy”, nine rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $1,476 with a high of $1,895 under a bull scenario and $844 under the worst-case scenario. The firm gave an “Equal-weight” rating on the restaurant’s stock.

“Better sales, mainly off-premise, will be a key driver of margins, but we see other underappreciated opportunities, including labor efficiencies from the ‘second make line’, and supply chain improvements. The new management team actively focused on improving the top-line through a variety of initiatives (digital, delivery, throughput, new products, marketing, etc.); we think there is a potential runway for many of these to support comps in a tougher environment,” Morgan Stanley’s Glass added.

“Brand and cultural refresh, further unit growth runway, and revamped marketing are also key parts of the story. Current challenges weighed against high expectations reflected in current stock price, in our view, drives our Equal-weight rating.”

Several other analysts have also updated their stock outlook. Chipotle Mexican Grill had its price objective raised by Truist Securities to $1,750 from $1,700. They currently have a buy rating on the restaurant operator’s stock. BTIG Research lifted their price objective to $1,600 from $1,450 and gave the company a buy rating.

Moreover, KeyCorp lifted their price objective to $1,625 from $1,475 and gave the company an overweight rating. Loop Capital lifted their price objective to $1,800 from $1,600 and gave the company a buy rating. Wells Fargo & Company lifted their price objective to $1,775 from $1,677 and gave the company an overweight rating.

Check out FX Empire’s earnings calendar