Chipotle Mexican Grill (CMG): Cutting Estimates After Weak Consumer Survey - RBC

October 18, 2016 6:38 AM EDT
Get Alerts CMG Hot Sheet
Price: $405.67 -1.86%

Rating Summary:
    17 Buy, 17 Hold, 8 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 11 | Down: 23 | New: 30
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RBC Capital analyst, David Palmer, reiterated his Outperform rating on shares of Chipotle Mexican Grill (NYSE: CMG) but cut his price target to $465 from $485 after reviewing data from a consumer survey which show a stabilized brand perception--but one that is stubbornly well below precrisis levels. A stronger recovery in consumer perception and pricing power could lead to a $595 upside scenario however, there is now a path to a lower $465 base case target.

Ahead of 3Q16 results, the analyst cut 2016 and 2017 EPS estimates from $4.59 and 12.04 to $3.54 (-77% YOY; cons. $3.67) and $10.42 (+194% YOY; cons. $10.10), respectively. The new 3Q SSS growth estimate of -20% (vs. -18% previously and -18% cons.) implies only modest sequential improvement over 2Q.

The new $465 price target equates to 32x the analyst's 2018e EPS estimate of $14.37 (+28% YOY; cons. $14.16).

For an analyst ratings summary and ratings history on Chipotle Mexican Grill click here. For more ratings news on Chipotle Mexican Grill click here.

Shares of Chipotle Mexican Grill closed at $394.35 yesterday.

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