Why Chipotle Mexican Grill Stock Is Sizzling Today

Why Chipotle Mexican Grill Stock Is Sizzling Today

Chipotle Mexican Grill Inc CMG shares are trading higher Wednesday after the company reported better-than-expected earnings results.

Chipotle said second-quarter revenue increased 17% year-over-year to $2.21 billion, which missed the estimate of $2.24 billion, according to data from Benzinga Pro. The fast-casual restaurant chain company reported quarterly earnings of $9.30 per share, which beat the estimate of $9.05 per share.

Comparable restaurant sales jumped 10.1% in the second quarter. In-restaurant sales increased 35.9%, while digital sales represented 39% of food and beverage revenue. 

Restaurant level operating margin was 25.2%, which was up from 24.5% year-over-year, benefitting from menu price increases. Chipotle said it opened 42 new restaurants in the quarter, with 32 locations featuring a "Chipotlane."

"Our pricing power and value proposition remain strong as our culinary and food with integrity commitment continues to be a key point of differentiation," said Brian Niccol, chairman, and CEO of Chipotle.

Chipotle said it expects third-quarter comparable restaurant sales growth to be in the mid to high-single digits. The company anticipates opening between 235 and 250 new locations in 2022. 

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Analyst Assessment:

  • Keybanc maintained Chipotle with an Overweight rating and lowered the price target from $1900 to $1750.
  • Cowen & Co maintained Chipotle with an Outperform rating and lowered the price target from $1830 to $1600.
  • BMO Capital maintained Chipotle with a Market Perform rating and lowered the price target from $1700 to $1600.
  • Citigroup maintained Chipotle with a Buy rating and raised the price target from $1742 to $1969.
  • Morgan Stanley maintained Chipotle with an Overweight rating and raised the price target from $1768 to $1808.

CMG Price Action: Chipotle has a 52-week high of $1,749.07 and a 52-week low of $1,196.28.

The stock was up 8.1% at $1,423 at time of publication.

Photo: courtesy of Chipotle.

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