SunTrust Still Expecting A Strong Comps Recovery At Chipotle

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Chipotle Mexican Grill, Inc. CMG shares have underperformed their restaurant peers over the past month, declining 12.9 percent.

Jake Bartlett of SunTrust Robinson Humphrey maintains a Buy rating on the company, with a price target of $550.

SSS Recovery Likely

Bartlett expressed a continued bullish stance on Chipotle, with expectations of robust same-store sales recovery going forward.

“The trajectory of NT SSS is disappointing, but we see multiple NT and LT drivers to a SSS recovery,” the analyst mentioned.

Related Link: 4 Takeaways Related To Chipotle's Food Safety Practices Probe

The 2Q same-store sales estimate has been lowered from a decline of 18 percent to a decline of 20 percent.

However, the analyst also pointed out that the near-term and medium-term drivers included loyalty, chorizo, digital ordering, delivery and catering, while favorable real estate and price-value propositions could be long-term drivers of same-store sales recovery.

The EPS estimates for 2016 and 2017 have been lowered.

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Posted In: Analyst ColorLong IdeasReiterationRestaurantsAnalyst RatingsTrading IdeasGeneralJake BartlettSunTrust Robinson Humphrey
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