Chipotle Mexican Grill (CMG): Quarter Looking Weak - Piper Jaffray

Piper Jaffray analyst, Nicole Miller Regan, maintained her Overweight rating on Chipotle Mexican Grill (NYSE: CMG) ahead of earnings this week. There have been both positive and negative news flows for the to-be-reported second quarter. However, the analyst's checks suggest traffic trends improved, albeit marginally, sequentially. With still much noise around same-store sales performance, 2Q16 comp estimates remain unchanged at (20%); she believes monthly performance was more or less in line with this estimate and believe traffic is down in the low double-digit range. Current long-term, patient investors should continue to own CMG shares. She believes the bear case continues to focus on 1) whether perception of the concept has changed permanently, 2) unknown level and performance of investments and 3) a concern that development may slow.

The analyst's LT bull case remains predicated on meaningful leverage existing when, not if, trends improve. No change to $590 price target on CMG shares based on ~20x our FY17 EBITDA.

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 $404.86 yesterday.

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