Chipotle's Same-Store Sales Story Keeps Wells Fargo Impressed
Jeff Farmer of Wells Fargo maintains a Market-Weight rating on Chipotle Mexican Grill, Inc. (NYSE: CMG) after the casual fast food chain reported encouraging metrics in its fourth-quarter results, which shows that the "wheels of progress are turning."
Same-Store Sales
Farmer noted that Chipotle's same-store sales trends in January rose 24.6 percent at a time when the company's level of promotional activity was subdued compared to prior months. This marks an improvement on both a one-year and two-year basis and the momentum could continue moving forward.
Farmer added that January's sales results don't even fully factor in various initiatives to spur same-store sales growth, including the roll-out of a true digital ordering platform, a national TV advertising campaign and the long-overdue pursuit of one-to-one marketing.
A Look Ahead
Looking forward, the analyst is modeling Chipotle's same-store sales growth to rise 16 percent in the first quarter and 10 percent in the second quarter — both of which are conservative estimates.
Farmer also pointed that Chipotle saw a notable same-store sales improvement in the Northeast markets, which has lagged other regions as of late.
The analyst sees a sustained same-store sales recovery through 2017, which should result in the Street moving their estimates higher over time. Consensus earnings per share for the year was $8.47 heading into Thursday's earnings print, which is short of Farmer's estimate of $9.62 per share.
Guidance, Rating And Price Target
Chipotle guided its full-year earnings to be $10.00 per share - a figure which will naturally be debated among analysts and investors.
Farmer maintains a Market Weight rating on Chipotle's stock with valuation range of $450 to $470.
At last check, shares of Chipotle were down 4.23 percent at $405.40.
Latest Ratings for CMG
Date | Firm | Action | From | To |
---|---|---|---|---|
Feb 2021 | Northcoast Research | Upgrades | Neutral | Buy |
Feb 2021 | Deutsche Bank | Maintains | Hold | |
Feb 2021 | Wells Fargo | Maintains | Overweight |
View More Analyst Ratings for CMG
View the Latest Analyst Ratings
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Posted-In: Analyst Color Earnings News Guidance Price Target Reiteration Restaurants Analyst Ratings Best of Benzinga