Chipotle Mexican Grill (CMG) Delay in Price Increase May Limit Near-Term Upside
Deutsche Bank today maintained a Hold rating on Chipotle Mexican Grill (NYSE: CMG) with a modified price target of $375.00 (from $360.00). Yesterday Chipotle reported Q2 EPS of $2.82, $0.01 better than the analyst estimate of $2.81. Revenue for the quarter came in at $816.8 million versus the consensus estimate of $802.8 million.
Commenting, Deutsche Bank's Jason West said, "CMG's 2Q results/call were somewhat mixed in that traffic came in stronger than expected, though mgmt. again delayed decision to raise menu pricing. CMG now has no plans to raise prices this yr., citing more stable food costs. The diminished bull case around pricing and relatively full valuation may limit near-term upside in the shares."
"While underlying SSS trends are better than expected, the delayed pricing causes us to trim forward EPS ests. 2013/2014E EPS move to $10.51/$13.11 from $10.64/$13.26. We now assume a price increase occurs in 2Q14 vs. 4Q13 previously. However, the improved traffic trend and roll-forward of the model causes us to raise our PT to $375 from $360," he added.
For an analyst ratings summary and ratings history on Chipotle Mexican Grill (NYSE: CMG) click here. For more ratings news on Chipotle Mexican Grill click here.
Shares of Chipotle Mexican Grill closed at $376.75 yesterday, with a 52 week range of $233.82-$404.59.
Commenting, Deutsche Bank's Jason West said, "CMG's 2Q results/call were somewhat mixed in that traffic came in stronger than expected, though mgmt. again delayed decision to raise menu pricing. CMG now has no plans to raise prices this yr., citing more stable food costs. The diminished bull case around pricing and relatively full valuation may limit near-term upside in the shares."
"While underlying SSS trends are better than expected, the delayed pricing causes us to trim forward EPS ests. 2013/2014E EPS move to $10.51/$13.11 from $10.64/$13.26. We now assume a price increase occurs in 2Q14 vs. 4Q13 previously. However, the improved traffic trend and roll-forward of the model causes us to raise our PT to $375 from $360," he added.
For an analyst ratings summary and ratings history on Chipotle Mexican Grill (NYSE: CMG) click here. For more ratings news on Chipotle Mexican Grill click here.
Shares of Chipotle Mexican Grill closed at $376.75 yesterday, with a 52 week range of $233.82-$404.59.