UPDATE: BMO Capital Markets Initiates Coverage On Chipotle Mexican Grill

BMO Capital Markets initiated coverage of Chipotle Mexican Grill, Inc. CMG with a Market Perform rating and $720 price target.

Analyst Andrew Strelzik believed "CMG will exceed expectations over the next 18 months" and suggested there is a "cushion to our above-consensus expectations in terms of same-store sales and food, labor, and general and administrative costs."

Despite expectations, Strelzik felt that "investors should wait for a more attractive entry point in CMG’s stock" because the company "is trading at a forward 12-month P/E and EV/EBITDA of 40-41x and 20-21x, which is 10-15 percent above its historical average valuation."

The report noted that "2014 and 2015 EPS estimates of $14.10 and $17.93 are above consensus by $0.41 and $0.46, respectively (3 percent)."

The price target implied a "40-41x P/E multiple on our 2015 EPS, which is in line with current levels, a 10-15 percent premium to its historical average (35-36x), and in line with its 55-60 percent premium to the restaurant industry over the past two years."

Chipotle Mexican Grill, Inc. closed at $660.61 Thursday, down 1.71 percent.