In a report published Friday, Wedbush analyst Nick Setyan downgraded Chipotle Mexican Grill, Inc. CMG from Outperform to Neutral and maintained a $510.00 price target.
Setyan commented that Chipotle's initiatives, mid-2014 price increase and catering roll out is reflected in the company's outperformance of 48.5% since early 2013. The analyst noted that the upside from expected mid-2014 price increase is “well-understood” to coincide with the 3-5% price increase for genetically modified organism (GMO)- free ingredients. Wedbush reported, “Given food inflation ahead of expectations in Q3 and guidance for cost of sales between 33.5-34.0% of sales over the next several quarters, we believe pricing at the high end of the indicated 3-5% range is likely. We estimate the contribution from an incremental 1% price increase relative to our 3% expectation would equal an incremental ~$0.19/quarter in EPS.”
Wedbush estimates that fourth quarter SSS growth will be in line with expectations at 6-7%. Setyan reported fourth quarter EPS estimate of $2.56 versus consensus of $2.52. The analyst expects $820 million in revenue versus consensus of $826 million. Setyan added that catering will add 75 bps to current AUVs and an additional $0.23 in annual EPS at 50% incremental margins.
Chipotle will host a conference call to discuss results on January 30 at 1:30 p.m. PT. Investors and the general public can listen in at (888)401-4674.
Shares of Chipotle closed at $503.45 on Thursday.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
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!
Already a member?Sign in