UPDATE: Raymond James Upgrades Chipotle, Sees Attractive Entry Point For Investors

In a report published Monday, Raymond James analyst Bryan Elliot upgraded Chipotle Mexican Grill CMG from Market Perform to Outperform and set a $560.00 price target, with the recent share price presenting an “attractive entry point.” Elliot emphasized that his prior neutral view on Chipotle was led by “valuation and heightened investor expectations. The stock now trades at 31.4x our 2015 EPS estimate, which we believe is very reasonable considering the company's 1) powerful underlying comp momentum; 2) low-double digit unit growth profile; 3) industry leading margins and unit economics; and 4) debt free balance sheet with a growing cash balance (currently $32.42 per share).” Raymond James expects Chipotle's margin performance to “dramatically” improve in the second quarter following the mid-single digit menu price increase in the summer. The analyst sees margin expansion accelerating EPS growth to 35-40 percent year-over-year. Elliot maintains his 2014 and 2015 EPS estimates of $12.65 and $16.00, respectively. Shares of Chipotle Mexican Grill closed at $501.77 on Friday. The stock is currently up 1.77 percent at $510.66.