SunTrust Robinson Humphrey’s Jake Bartlett reiterated a Buy rating on Chipotle Mexican Grill, Inc. CMG, while raising the price target from $520 to $550.
Same-Store Sales Decline
Although the company’s February same-store sales and 1Q16 EPS guidance were both lower than estimated, Bartlett expects investors to “take a longer-term view on valuation given recovering (albeit slowly) sales.”
Related Link: Maxim Says 'Not So Fast' On Chipotle, Downgrades To Sell
February same-store sales declined 26.1 percent, worse than the estimate of a 17 percent decline and consensus expectations of a 23 percent decline.
However, the analyst believes that sales were adversely impacted by Chipotle Mexican Grill’s free burrito giveaway, which might have led to cannibalization.
Estimates Lowered
The EPS estimates for 2016, 2017 and 2018 have been lowered by 40 percent, 16 percent and 13 percent, respectively.
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