Sterne Agee Raises Chipotle PT to $742, Sees ~24% Upside

Sterne Agee raised the price target for Chipotle Mexican Grill CMG from $603 to $742 and reiterated a Buy rating. The new price target is 24 percent above current levels. Analyst Lynne Collier said Chipotle leads the industry in “unit-level margins of 26.6% (FY13), traffic trends and restaurant-level returns of 70%+...and new concept (ShopHouse and Pizzeria Locale) provide increased visibility into long-term unit growth opportunities.” Collier raised earnings per share estimates in addition to bumping her price target:

• Q1 -- from $2.82 to $2.85
• '14 -- from $13.11 to $13.17
• '15 -- from $16.34 to $16.50

Shares of Chip are unchanged in pre-market trading after closing at $596.50 on Wednesday.