Market Overview

Wedbush Dishes Up 4 Reasons To Like Chipotle Mexican Grill

Wedbush Dishes Up 4 Reasons To Like Chipotle Mexican Grill

Chipotle Mexican Grill, Inc. (NYSE: CMG) has shown recent momentum in its business and this could be sustained over the long term, Wedbush said in a research report.

The Analyst

Wedbush analyst Nick Setyan upgraded Chipotle Mexican Grill from Neutral to Outperform with a price target lifted from $780 to $980.

The Thesis

Wedbush hasn't held a bullish stance on Chipotle's stock since at least 2016 but the case can be made for four reasons.

  1. Setyan said the restaurant is well positioned to be a leader in the "digital real estate" space and online orders should account for more than 30% of all sales by the end of 2021.
  2. Chipotle is expected to show in its upcoming third-quarter report same-store sales growth of 9.5%, which is above the Street's current estimate of 8.8%. Setyan said strength is likely to come from digital orders, delivery, and increased marketing.
  3. The company's menu innovation like quesadillas and new salads has yet to "kick in meaningfully." Similarly, initiatives to improve throughput will help improve comps once fully implemented.
  4. The case for turning bullish on Chipotle is partly based on its stand-out ability to expand in-store margins. Margins could move higher from its unique supply chain, a dedicated digital line, and favored status with third-party delivery platforms.

Benzinga's Take

Wedbush's revised price target is based on 52 times 2020 estimated EPS. The multiple might be too rich to stomach as recent food-related illness outbreaks remain fresh in many investors' minds.

Do you agree with this take? Email with your thoughts.

Related Links:

Analyst Sees Chipotle's Valuation As A Little Stretched

Chipotle Shares Hit New All-Time Highs: The Street Debates What's Next

Photo credit: Mike Mozart, Flickr

Latest Ratings for CMG

Nov 2020BarclaysInitiates Coverage OnOverweight
Oct 2020Deutsche BankMaintainsHold
Oct 2020Wells FargoMaintainsOverweight

View More Analyst Ratings for CMG
View the Latest Analyst Ratings


Related Articles (CMG)

View Comments and Join the Discussion!

Posted-In: Casual Fast FoodAnalyst Color Upgrades Price Target Restaurants Top Stories Analyst Ratings General Best of Benzinga

Latest Ratings

View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
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