4 Chipotle Analysts React To Q4 Earnings: 'Poised To See Accelerated Market Share Gains'

Chipotle Mexican Grill Inc CMG shares surged higher by about 7% Tuesday night after the fast-casual restaurant chain reported strong fourth-quarter earnings results and issued guidance. 

What Happened: Chipotle said quarterly revenue increased 22% year-over-year to $1.96 billion, which was in line with estimates. The company reported adjusted earnings of $5.58 per share, which beat the $5.26 estimate. 

Comparable restaurant sales increased 15.2% year-over-year and digital sales jumped 3.8%, accounting for 41.6% of sales.

Looking ahead, Chipotle said it expects first-quarter comparable restaurant sales growth in the mid-to-high single digit range. The company also announced that it expects to open between 235 and 250 new restaurants in 2022.

Related Link: Chipotle Mexican Grill: Q4 Earnings Insights

4 Chipotle Analyst Takes: Cowen analyst Andrew Charles maintained Chipotle with an Outperform rating and lowered the price target from $2,250 to $1,950. 

"While CMG is not immune from industry inflation pressures, proprietary survey data highlights pricing power," Charles said in a note.

Longer term, the analyst said Chipotle's development story "has new legs" after the company announced a higher-than-expected growth outlook for 2022 and beyond. 

Stephens analyst James Rutherford also highlighted Chipotle's improved growth outlook and pricing power.

Rutherford said "things are going well for Chipotle," as staffing levels are improving and the company continues to add Chipotlanes to existing locations. The Stephens analyst has an Overweight rating and $2,150 price target on the stock.

Wedbush believes Chipotle "is poised to see accelerated market share gains in a post- COVID environment, resulting in sustained growth above pre-COVID levels and an expanding premium relative to its pre-COVID valuation."

Webush has an Outperform rating and $2,000 price target on Chipotle. 

KeyBanc expressed a lot of the same sentiment.

"Sales trends moderated beginning in mid-December due to Omicron/weather, but forward commentary seems to suggest a recovery is well underway and profitability is expected to improve sequentially in 1Q with the full benefit of recent pricing actions," according to the sell-side firm. 

KeyBanc has an Overweight rating and $1,850 price target on the stock.

CMG Price Action: Chipotle has traded as low as $1,256 and as high as $1,958 over a 52-week period.

The stock was up 9.61% at $1,600 Wednesday afternoon. 

Photo: courtesy of Chipotle.