Chipotle Mexican Grill Could Benefit From The Fall In Chicken Prices, Says Analyst

  • Oppenheimer analyst Brian Bittner reiterated an Outperform rating on the shares of Chipotle Mexican Grill Inc CMG with a price target of $1,800.
  • Bittner's analysis suggested an attractive setup for same-store sales, while consensus still overly discounted the equation for margins and EPS power through 2023.
  • He further supports his analysis through accelerating unit growth and a CMG food commodity setup that appears to be improving.
  • The analyst expects Chipotle to report Q3 FY22 earnings above Street estimates and believes the buyside's nervousness around Q4 FY22 trends presents an actionable opportunity.
  • The fall in the prices of chicken, avocados and a slight rise in beef could enhance margin path through 2023.
  • Bittner added a less bad food cost environment could drive less aggressive price increases, leading to better traffic and an improving investment narrative toward shares.
  • Chipotle's accelerating unit growth in 2022 and beyond with higher return Chipotlanes appears overlooked, while International represents complete optionality, said the analyst.
  • Also ReadMorgan Stanley Thinks Europe Exposure & FX Headwinds Weigh On Q3 Earnings For Restaurants
  • Price Action: CMG shares are trading higher by 3.08% at $1,554.80 on the last check Monday.
  • Photo Via Company
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