Rumor Has It Chipotle's Queso Launch Planned For Sept. 12

Analysts at Credit Suisse are working under the assumption that Chipotle Mexican Grill, Inc. CMG is prepping for a national launch of its queso cheese dip as soon as Sept. 12. The casual fast food restaurant chain has been testing its queso product in 350 restaurants since Aug. 1, and numerous store checks across the U.S. suggest a national launch is weeks away, the firm's Jason West commented in a research report.

The launch of a queso product could boost Chipotle's sales by 1 to 3 percent, which would "move the needle" but is short of a "silver bullet," West stated. This is based on the assumption that one in four customers will add queso to their order and around one-half of these add-ons cannibalizes guacamole.

tipranks.png

Chipotle is also expected to advertise the new queso item through a national TV ad campaign which is expected to debut in late September, the analyst added.

However, despite the potential for a sales boost, Chipotle continues to struggle with its brand turnaround in the overcrowded fast casual restaurant market and rising labor costs, West added. These pressures will likely result in future sales disappointments in earnings report — even if queso is as successful as expected.

West maintains a Neutral rating and $320 price target on Chipotle's stock, which implies a 33x on his 2018 earnings per share estimate.

Related Links:

Chipotle's Avocado Problem

Has Chipotle Hit Its Bottom? Stock Gets An Upgrade

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorNewsPreviewsReiterationRestaurantsEventsAnalyst RatingsTrading IdeasGeneralCasual Fast FoodChipotleJason WestQueso
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!