UPDATE: Guggenheim Starts Chipotle Mexican Grill (CMG) at Neutral
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Guggenheim analyst Gregory Francfort initiates coverage on Chipotle Mexican Grill (NYSE: CMG) with a Neutral rating and a price target of $1,750.00.
The analyst comments "Chipotle is a best-in-class growth story in limited-service with high single digit unit growth coupled with mid to high single digit normalized same store sales driving, by our math over 2019-2023, 13-14% revenue growth and 25% EPS growth. The company has 2,800 units and roughly $7.5bn in annual revenue, below McDonald’s at $40bn, Chick-Fil-A at $14bn and many limited-service peers in the $9-10bn range, suggesting that the company should continue to run outsize unit growth vs. peers. Before an E.coli outbreak in late 2015, Chipotle had nearly $2.6mn AUVs with 27-28% restaurant level margins. Following the food safety incident, AUVs fell to $1.8mn with 13% margins in 2016 before a multi-year expansion brought AUVs back to roughly $2.2mn pre-Covid with 20-21% restaurant margins. This breakdown pre-Covid was $0.4mn for digital sales (including delivery) with $1.8mn for non-digital with recent $2.6mn AUVs comprised of $1.3mn for each of the digital and non-digital business."
Shares of Chipotle Mexican Grill closed at $1830.92 yesterday.
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