Goldman Sachs Reiterates Buy Rating on Chipotle Mexican Grill (CMG)

Goldman Sachs analyst Christine Cho reiterated a Buy rating and $69.00 price target on Chipotle Mexican Grill (NYSE: CMG)

The analyst comments "Shares of CMG are down 15% from its YTD highs in June vs the S&P 500 +4% and our Fast Food/Casual coverage average +2.5%. We believe the pull-back in shares is, at least in part, due to uncertainties around the recently announced management changes as well as growing concerns around the relative value proposition of fast casual brands vis-à-vis fast food brands. In this report, we point to two positive indicators that support our still-constructive 2H24/2025 view: (1) HundredX NPI is starting to turn in a more positive direction with portion size reverting to a relative advantage vs. quick, fast, casual peers in August (vs. disadvantage in Jun-Jul following Tik Tok reviews claiming declining portion sizes at Chipotle) as the company continues to address the portion size inconsistencies, and (2) Proprietary Twitter data analysis in collaboration with GS Dataworks suggests that the consumer reception of Chipotle's smoked brisket relaunch on Sep 10 has been largely positive with quite a bit of excitement around its return. While we have not yet seen meaningful acceleration in observed traffic (as per Placer), we view premium priced smoked brisket (i.e. 17% higher price than normal steak and 39% higher vs. chicken on average based on our price checks in 11 major cities) as a key driver of average check, providing SSSG support in 2H24E/1Q25E. Retain Buy rating with our $69 target price implying 18% upside potential."

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 $58.38 yesterday.

You May Also Be Interested In

• Stripe, Advent In Talks To Buy Paypal - WSJ
• Fiserv (FISV) PT Lowered to $60 at Freedom Broker
• Home Depot (HD) call put ratio 1.5 calls to 1 put with a focus on September 330 puts into quarter results