Market Overview

Stifel Sees Reboot Opportunity For Chipotle, Upgrades From Sell To Hold

Stifel Sees Reboot Opportunity For Chipotle, Upgrades From Sell To Hold

While Chipotle Mexican Grill, Inc. (NYSE: CMG)'s traffic has declined and its margins deterioriated, recent management changes and turnaround initiatives could pave the way for a much-needed reboot, according to Stifel.

The Analyst

Chris O’Cull of Stifel upgraded Chipotle from Sell to Hold and raised the price target from $250 to $275.

The Thesis

Chipotle will struggle to recover sales and customer traffic — which bottomed out in 2016 — as competitors in the quick service restaurant sector have worked to improve food quality and value, O’Cull said in a Tuesday note. (See the analyst’s track record here.)

“Chipotle has been a pioneer in the fast-casual restaurant category, but their strategy has been copied by a plethora of restaurant concepts that have emerged during the past few years, and it has forced traditional QSR chains to improve the quality of their products," O'Cull said. 

Chipotle also faces a challenge in alleviating customer health concerns such as the 2015 E.coli outbreak, which devastated sales, the analyst said. 

The hiring of CEO Brian Niccol has elevated optimism, as many investors believe Niccol can reverse Chipotle’s traffic and margin trends, O’Cull said.

“Over the past three years, Mr. Niccol has pushed the boundaries at Taco Bell and solidified their position in the consumer's awareness. Chipotle needs a similar reboot to help the brand re-engage lapsed customers.”

Price Action

At the time of publication, shares of Chipotle were trading up 4.74 percent at $320.12. 

Related Links:

Jim Cramer Hates Chipotle's CEO Pick

Fast-Food Workers Are Now In High Demand

Latest Ratings for CMG

Oct 2019MaintainsSell
Oct 2019MaintainsOutperform
Oct 2019MaintainsNeutral

View More Analyst Ratings for CMG
View the Latest Analyst Ratings

Posted-In: Brian NiccolAnalyst Color Upgrades Price Target Restaurants Top Stories Analyst Ratings General Best of Benzinga


Related Articles (CMG)

View Comments and Join the Discussion!

Latest Ratings

VRTXCantor FitzgeraldMaintains229.0
HCMCLSAInitiates Coverage On
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Data Points To More Highs For This E-Commerce ETF

The Top 5 Tech And DevOps Exhibits Expected At The 2018 GSMA Mobile World Congress In Barcelona