|Bid||450.30 x 200|
|Ask||450.33 x 100|
|Day's Range||448.79 - 453.60|
|52 Week Range||247.52 - 474.46|
|PE Ratio (TTM)||67.66|
|Earnings Date||Jul 24, 2018|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||416.70|
Investing.com - Enough is enough.After an 80% spike since Brian Niccol was named CEO in February, Chipotle shares were downgraded to sell by Mizuho.In a note to clients, the Wall Street firm said investors "should reduce their risk" because the stock price already reflects an "aggressive recovery" in sales and profit margins.Niccol recently outlined his turnaround plan for the burrito chain, but analysts called it short on details.Given that, Mizuho said there are no clear catalysts to "justify significant earnings upside." Mizuho, however, did acknowledge Niccol's "impressive track record" as CEO of Taco Bell, calling him the "best choice to lead Chipotle."Niccol replaced founder Steve Ells, who struggled to guide the company back from a series of food safety incidents dating back to 2015. The stock traded as high as $750 a share back then.
Chipotle's (CMG) top line in the second quarter is likely to be driven by improved comps and restaurant openings, various sales-building and strategic initiatives.
"We are cautious on CMG's ability to generate improvement and see the shares as already reflecting an optimistic view. We doubt this optimism will evaporate with 2Q results but we would nevertheless reduce positions in Chipotle." Starbucks has hotter prospects. Zolidis notes that the coffee giant already pre-released second-quarter same-store-sales data, with revenue rebounding last month, and has "strongly hinted" that it will reduce long-term-growth targets, which would be a relief to many investors.
On July 17, Chipotle Mexican Grill (CMG) was trading at $452.54 per share. On the same day, analysts expected the company’s stock price to reach $416.70 in the next 12 months, which represents a fall of 7.9% from its current stock price. From the graph below, we can see that the average price target has increased from $314.48 in April to the current $416.70.
Of all the available valuation multiples, we have opted for the forward PE (price-to-earnings) multiple for our analysis due to high visibility in Chipotle Mexican Grill’s (CMG) earnings. The forward PE multiple is calculated by dividing the company’s stock price by analysts’ EPS estimates for the next four quarters. The strong first-quarter earnings and SSSG (same-store sales growth) measures adopted by Chipotle’s management have driven the company’s sales.
Wall Street analysts expect Chipotle Mexican Grill (CMG) to post second-quarter EPS of $2.80, which represents a rise of 20.7% from $2.32 in the second quarter of 2017. This EPS growth is expected to be driven by revenue growth, expansion of net margin, and share repurchases. Analysts expect Chipotle’s net margin to improve from 5.7% in the second quarter of 2017 to 6.1%.
Wall Street analysts expect Chipotle Mexican Grill (CMG) to post revenues of $1.26 billion, which represents a YoY (year-over-year) increase of 7.7% from $1.17 billion. This revenue growth is forecast to be driven by the addition of new restaurants and positive SSSG (same-store sales growth). By the end of the first quarter, Chipotle operated 2,441 restaurants compared to 2,295 restaurants by the end of the second quarter of 2017.
Chipotle Mexican Grill (CMG) plans to post its second-quarter earnings after the market closes on July 26. On July 17, CMG was trading at $452.54, which represents a 33.3% increase since the announcement of its first-quarter earnings on April 25. The company’s stock price was driven by strong first-quarter earnings and initiatives that were taken by the company’s management to drive its sales.
It was only a couple of years ago that fast casual dining was the biggest trend in the restaurant industry. Now, can Chipotle (CMG) lead a rebound in the dying trend?
On July 10, Mizuho Securities downgraded Chipotle Mexican Grill (CMG) from “neutral” to “underperform.” Following the downgrade, Chipotle’s stock price fell. By the end of the day, Chipotle was trading at $454.21—a fall of 2.1% from the previous day’s closing price.
On July 10, Jeremy Scott of Mizuho Securities downgraded Chipotle Mexican Grill (CMG) from “neutral” to “underperform.” Scott raised Chipotle’s target price from $300 to $330. The new target price represents a fall of 27.3% from the closing price of $454.21 on July 10. As reported by CNBC, in Scott’s research he said, “While it is our view that Niccol is the best choice to lead Chipotle from here, in the absence of clear catalysts that can justify significant earnings upside, we’re compelled to recommend investors reduce their risk.
A Tuesday note from Mizuho Securities, in which its analysts set an “underperform” rating and a $330 share price target that’s well below current levels and FactSet’s current mean target of about $416, discussed reasons menu innovation could challenge the company. “In a concept where the vast majority of traffic occurs in the lunch daypart and the productivity of its line crew thrives on the simple ordering option tree, innovation can carry unintended consequences,” the analysts wrote. Some of their observations: • The analysts lauded management’s stated intention to carefully craft processes around the actual production of new menu items, noting what might be interpreted as “a lower risk tolerance with regards to menu development.” • They also recently visited the Next Kitchen, where they observed some of the challenges—which we discussed after our own visit—firsthand.
On-demand food delivery startup Postmates is adding 100 markets nationwide and expanding its partnership with Chipotle.
Postmates is expanding into 100 new cities, encompassing 50 million new potential customers. The company is also deepening its partnership with Chipotle, adding delivery from 300 new locations. The company is in a race with larger on-demand delivery rivals, including Amazon, Grubhub, Uber and DoorDash.
•...and highlight a downgrade for Chipotle Mexican Grill (CMG). S&P 500 futures have ticked up 0.1%, while Dow Jones Industrial Average futures have risen 63 points, or 0.3%. Nasdaq Composite futures have advanced 0.1%.
Mizuho downgrades Chipotle shares to underperform, encouraging clients to curb exposure until it’s clear chief executive Brian Niccol can replicate the success he had at Taco Bell. “After an 80 percent run since Niccol's appointment as CEO, we believe the stock currently prices in an aggressive recovery," analyst Jeremy Scott writes. Chipotle shares remain up more than 60 percent so far this year.
Investors should sell Chipotle given a lack of clear innovation in the near-term, according to one analyst, and limit any upside for the already recovered stock.
The burrito roller makes an analyst's Fresh Picks list, but the chain has a lot to prove when it reports financial results on July 26.
The second half of 2018 will be tough for investors as they grapple with rising trade tensions and higher interest rates, according to Goldman Sachs. Companies with strong balance sheets, however, should do well in the tough times ahead.
Investors including Kimbal Musk, Acumen and TOMS Social Enterprise fund are pouring $5.3 million into Everytable, a health-minded fast casual restaurant . Customers in low-income neighborhoods pay a lower price than customers in high-income neighborhoods. Dissatisfied with fast-food menu options, and higher prices at health-minded restaurant chains, Everytable CEO Sam Polk embarked on a mission to make nutritious meals convenient and affordable for all.