Baird: Slow-Down At Chipotle Mexican Grill Inc. Is 'Short-Term Headwind'

Chipotle Mexican Grill Inc. CMG shares could continue to be volatile as the company faces a slowdown in growth, an analyst said Thursday. The Denver-based company, nearly unchanged recently at $679, is off more than 4 percent since February, when it forecast 2015 same-store sales growth in the "low to mid-single digits" compared with 17 percent last year. But Baird's David E. Tarantino called that concern a "short-term headwind" and maintained an Outperform rating and $800 target. Sentiment on the stock "could remain skittish," according to Tarantino, until the company "cycles through the most difficult comparisons." Tarantino expects first-quarter same-store sales will grow 11.5 percent, a slowdown from both the 13.5 percent rate of a year earlier and 16.1 percent in the recent fourth quarter. But Tarantino said the company's price-to-earnings "premium" relative to the average stock in the S&P 500 is now 25 percent below its two-year mean, while Chipotle revenue will continue to feature fast growth driven by additional stores. Wall Street on average expects Chipotle will post first-quarter earnings growth of 38 percent to $3.64 a share, on revenue growth of 22 percent to $1.1 billion.