Varying Analyst Opinions on Chipotle Mexican Grill, Inc. (NYSE:CMG)
Close on the heels of Chipotle Mexican Grill, Inc. (NYSE:CMG) announcing its March quarter results, different analysts’ have come out with their opinion about the performance. The company’s earnings topped the Street estimations while revenue fell shy of the Street expectations. Let’s look at the take of different analysts.
TAG said that it was impressed with Chipotle Mexican Grill, Inc. (NYSE:CMG)’s continuous solid sales trends driven by enhanced throughput and marketing, as well as, growth in catering. The brokerage said that the pricing roll-off will reflect in moderate comps throughout the current year. This meant comps dropping to the high-single digits in the second quarter and then to mid-single digits during the second half of the current year.
Despite significant long-term growth prospects, TAG believes that the deceleration in sales and earnings limit the upside potential of the stock. The brokerage said that the challenging comparisons would lead to negative traffic modestly in the second half of the current year. The brokerage rated it as Market Perform.
The brokerage said that same-store-sales was weaker than expected though earnings per share topped. It was blamed on weather inclement, limited availability of pork, and tough same store sales comps. The management cautioned SSS trends to decelerate in view of tough comparisons through the year 2015.
Despite ominous overtone to the second – fourth quarter expectations, earnings per share was forecast to improve on lower tax rate and cost of sales. Wunderlinch advised Hold rating on the shares of Chipotle Mexican Grill, Inc. (NYSE:CMG).
The investment advisor said that they expect promising margin trends and raised their price objective on Chipotle Mexican Grill, Inc. (NYSE:CMG) to $715 from $710. The brokerage noted the resolution of the supply issue concerning pork. Miller Tabak expects the company’s strong cash position to accelerate its share buyback.
The brokerage was convinced that there were a number of factors to support average 25% growth in EPS in the next two years. However, it said that it would wait for a pullback in the stock before seeking to enter the counter.
The brokerage said that regional sales disparities were due to the weather impact in combination with the ill-advised rolling of pork out of stocks. As a result, it was hard to predict the quarterly numbers. However, RBC Capital Markets said that sales would moderate on Year-on-Year basis. The brokerage kept a price tag of $740 on the shares of Chipotle Mexican Grill, Inc. (NYSE:CMG).
One more brokerage said that 10%+ comps were not good enough to satisfy the nervous investors though its EPS topped estimations in the first quarter. Oppenheimer reiterated its Outperform rating with a price target of $775.
Raymond James has downgraded Chipotle Mexican Grill, Inc. (NYSE:CMG) shares to Market Perform from Outperform. Similarly, Pipe Jaffray reduced its price objective to $700 from $750 and retained Overweight rating target. In the same way, Barclays reduced its price tag to $685 from $730 whereas Credit Suisse cuts its price target to $770. However, Janney boosted FV estimate to $825.
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