Chipotle Mexican Grill (CMG) Tops Q3 Estimates, Analysts Ultra Bullish
Chipotle Mexican Grill (NYSE: CMG) delivered another quarterly beat. The company reported Q3 EPS of $7.02 to top the analyst estimate of $6.26. Revenue for the quarter came in at $2 billion versus the consensus estimate of $1.93 billion.
Comparable restaurant sales soared 15.1% while digital sales rose 8.6% and accounted for 42.8% of total sales.
"Chipotle's third quarter results demonstrate strong momentum in our business fueled by a multi-pronged strategy and a passionate team that's delighted to welcome more guests back into our restaurants," said Brian Niccol, Chairman and CEO, Chipotle.
Truist analyst Jake Bartlett reiterated a Buy rating and hiked the price target to $2,180.00 per share from the prior $1,800.00 as strong same-store sales trends and development pipeline outweighed margin pressure.
“Following 3Q21 results (SSS and EPS beat), strong current sales trends and a robust new store pipeline, we are increasing our ests. and PT to $2,180. CMG continues to see industry leading SSS, driven by its digital flywheel (data from rewards and digital sales driving digital marketing), menu innovation and marketing, with further upside from improved throughput. Operating cost inflation is a NT headwind, but margins are solid and CMG's LT framework appears intact. CMG's strong new store pipeline, plus the prospect of int'l growth, gives us increased confidence in accelerating development,” Bartlett said in a client note.
Cowen analyst Andrew Charles also reiterated an Outperform rating and his $2,250 price target on CMG as he believes the company is well-positioned to deliver a 4Q beat as well.
“Importantly, CMG has beat on margins the past 2 consecutive quarters, while the company blessed guidance for 27%-28% margins at $3M sales volumes. We highlight both we & Consensus Metrix model $3M AUV's in 2024 though note consensus is modeling 27.0% restaurant margins, or the low end of the range, vs our 27.6%. We fine-tune our 4Q21 and 2022 store level margins to 20.8% and 24.9%, from 23.0% and 25.1%, relative to CM 22.8% and 24.65%, respectively. CMG is open-minded but noncommittal on taking the perennial 4Q price increase, and is thus not factored into guidance,” Charles said in a client note.
Shares of CMG are down half a percent in pre-open Friday.