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Citi Raises Target On Chipotle To $605

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Citi Raises Target On Chipotle To $605

Citi's Gregory R. Badishkanian has maintained a Buy rating on Chipotle Mexican Grill, Inc. (NYSE: CMG), while raising the price target from $551 to $605.

The company reported its 4Q same-store sales in line with its pre-announcement in early January of a 14.6 percent decline. The EPS for the quarter, however, beat expectations and guidance, and included benefits worth 31 cents from lower stock comp.

"SSS pressure has continued into January and 1Q EPS are expected to be around breakeven," Badishkanian stated, while mentioning, "While the co plans to step up marketing and promotional spending next week following the recent conclusion of the CDC investigation, we expect any recovery to be somewhat slow."

Related LInk: Chipotle's Food Safety Issues Beginning To Look A Bit More Serious

Chipotle Mexican Grill plans to undertake further marketing and promotion from the second week of February in an attempt to win customers back.

The company's data shows that "consumer awareness of the incident is high, and investments will be 1H weighted but could continue depending on performance," according to the Citi report.

In the meantime, management is focused on staffing at high levels in order to deliver returning customers "a top class experience."

The EPS estimates for 2016 and 2017 have been lowered by $5.01 and $2.69, respectively.

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Latest Ratings for CMG

DateFirmActionFromTo
Jul 2019Initiates Coverage OnSell
Jul 2019MaintainsEqual-Weight
Jul 2019MaintainsOverweight

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