Chipotle (CMG) Investors Underestimating Impact of Commodity Inflation - Analyst

February 6, 2013 1:11 PM EST
Get Alerts CMG Hot Sheet
Price: $405.87 -1.19%

Rating Summary:
    15 Buy, 19 Hold, 8 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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Chipotle Mexican Grill (NYSE: CMG) stock opened higher following release of the company's Q4 earnings results Monday evening. Despite decent numbers, analysts at Jefferies remain underwhelmed, to say the least.

"The stock's resilience seems to reflect the belief that this price action is the panacea to growth, but we think shares will trade lower as investors realize the magnitude of commodity infl. and lack of SSS drivers," said analyst Andy Barish.

Barish said management comments on a follow up conference call gave little confidence Chipotle Mexican Grill can stop SSS deceleration and turn margins.

"We could see some lift from the mktg push and 2H should benefit from 3-5% price (we est. 3%), but we think the stock is overvalued at its current 31x multiple," conclude the analyst.

Jefferies has an Underperform rating on Chipotle Mexican Grill (NYSE: CMG) with a price target of $215.00.

For an analyst ratings summary and ratings history on Chipotle Mexican Grill (NYSE: CMG) click here. For more ratings news on Chipotle Mexican Grill click here.

Shares of Chipotle Mexican Grill closed at $305.01 yesterday.

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Cheryl on 2013-02-06 18:08:15
Mark as Spam | Reply to this comment

Someone forgets that commodity prices affect ALL foodstuffs and people have to eat. CMG will raise their prices (as will MCD, PepsiCO, PNRA, etc). CMG still has a giant upside in store openings and a second concept being expanded with Shophouse. CMG also has the cashflow. Someone must be upset with the upside today.

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