Chipotle Mexican Grill (CMG) Raised Prices on Smoked Brisket - KeyBanc

KeyBanc analyst Eric Gonzalez reiterated an Overweight rating and $66.00 price target on Chipotle Mexican Grill (NYSE: CMG).

The analyst commented, "Based on our proprietary scrape of Chipotle’s digital menu, the Company appears to have raised prices on Smoked Brisket in ~2,700 of its ~3,500 locations (~77%). According to our data, prices increased by $0.30 for Smoked Brisket carryout orders and $0.40 for delivery orders in most locations. Depending on the location, this represents a 2.2-2.5% menu price increase on Smoked Brisket entrées. Assuming a 20% sales mix, this implies an effective price increase of 30-40 bps. However, we suspect the promotion will sunset before the end of the fourth quarter."

"Importantly, while we do not know the motivation behind this relatively small increase, we suspect it could be a sign of elevated demand for the product. We note that the margin profile of Smoked Brisket is lower than that of other limited time offers. On the 2Q24 earnings call, the Company forecasted 3Q24 COGS of 31%—a 160 bps step up vs. 2Q24—and implied that approximately one-third of the sequential increase was due to higher protein costs associated with the transition from Chicken Al Pastor to Smoked Brisket. This suggests the Company is taking steps to protect profitability during what appears to be a successful promotional period."

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 $56.73 yesterday.

You May Also Be Interested In

• Stripe, Advent In Talks To Buy Paypal - WSJ
• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• SVB & T Corporation (SVBT) Tops Q2 EPS by 275c