Chipotle's Traffic Momentum May Be Sustained, Despite Menu Price Hike
On Friday, Sterne Agee raised the price target for Chipotle Mexican Grill (NYSE: CMG) from $603 to $742 and reiterated a Buy rating.
Analyst Jack Kindregan is more confident “traffic momentum can be sustained as Chipotle raises prices later this year.”
Menu prices are likely to increase five percent, versus four percent previously, according to the Sterne analyst. The price hike would result in a “3-4% net benefit to same store sales,” said Kindregan.
The analyst is also assuming “increased margin flow-through from higher same store sales growth in base case.” Kindregan's new upside scenario is based on “low double-digit same store sales growth and additional margin expansion” beyond the previously mentioned base case scenario.
Shares of Chipotle are up 1.9 percent to $569.20 in Friday's trading.
Latest Ratings for CMG
|Oct 2016||Goldman Sachs||Maintains||Neutral|
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.