UPDATE: Chipotle Mexican Grill (CMG) on Path to $3M AUV, PT Raised to $2,075 at Credit Suisse
Credit Suisse analyst Lauren Silberman raised the price target on Chipotle Mexican Grill (NYSE: CMG) to $2,075.00 (from $1,950.00) after the company reported a strong 2Q with top & bottom line beats, including SSS of 31.2% (2-yr 18.3%), EPS of $7.46 (cons $6.53) & restaurant margin of 24.5% (cons 23.7%). Underlying trends accelerated in June and into July, with CMG guiding 3Q SSS in the low to mid double-digit range, above consensus’ ~10%, and implying an acceleration in 2-yr SSS to 20-25%.
The analyst reiterated an Outperform rating, stating "CMG has reached a milestone, with underlying AUVs returning to peak $2.5MM, and we believe CMG is on path to exceed $3MM AUVs & deliver restaurant margins in the high 20% range, translating to the best unit economics in restaurants, with hopes to improve best-in-class 60-65% cash-on-cash returns to near 80-100%. CMG continues to be one of our favorite NT & LT stocks as a rare compounding growth story positioned for double-digit top-line, margin expansion & unit growth acceleration over the years to come."