5 Chipotle Mexican Grill Analysts Dive Into 'Clean Beat' In Q1

Shares of Chipotle Mexican Grill, Inc. CMG jumped in early trading on Wednesday after the company reported upbeat quarterly earnings on price hikes. Here are some key analyst takeaways from the earnings call.

Morgan Stanley On Chipotle Mexican Grill

Analyst Brian Harbour reiterated an Equal Weight rating while raising the price target from $1,743 to $1,910.

Chipotle Mexican Grill reported a “clean beat” in its first-quarter results, with “solid sales trends,” Harbour said in a note.

The company demonstrated strong operational execution and achieved robust unit growth, “which isn't subject to franchisee sentiment or changes in the near term financing backdrop, and therefore quite safe, in our view,” the analyst wrote. “Bear questions around traffic, margins on the back burner for now, leaving a clearer growth narrative,” he added.

William Blair On Chipotle Mexican Grill

Analyst Sharon Zackfia maintained an Outperform rating on the stock.

“Chipotle’s first-quarter EPS were well ahead of our/consensus expectations, reflecting better-than-expected sales (and associated leverage) on accelerating comps/traffic, lower-than-expected cost of sales on favorable avocado prices, lower-than-expected G&A, and an approximate $0.35 benefit from a lower-than-expected tax rate,” Zackfia wrote.

While April’s traffic trends “have remained similar to the first quarter,” the frequency among lower-income customers “has exhibited some recovery relative to the second half of 2022,” she added.

Stephens On Chipotle Mexican Grill

Analyst Joshua Long reaffirmed an Overweight rating while raising the price target from $1,970 to $2,000.

Chipotle Mexican Grill’s quarterly results were strong, “including a top-line beat on positive traffic which flowed through to better-than-expected restaurant-level margins, driving higher-than-expected adj. EPS,” Long said.

“Unit growth was softer-than-expected attributable to ongoing supply chain pushes/pulls however Chipotle reiterated its FY23 unit growth guide,” he added.

Check out other analyst stock ratings.

KeyBanc Capital Markets On Chipotle Mexican Grill

Analyst Eric Gonzalez reiterated an Overweight rating, while raising the price target from $1,870 to $2,050.

Chipotle Mexican Grill’s digital mix improved by around 2 points to 39.3%, while its same-store sales growth and store-level margin outlook for the second quarter and full year “implies results at or above consensus,” Gonzalez stated.

He added that the company’s strong traffic momentum and pricing power are likely to continue, and improve the “profit flow-through relative to our prior expectations.”

Wedbush On Chipotle Mexican Grill

Analyst Nick Setyan maintained an Outperform rating, while raising the price target from $2,080 to $2,200.

The company reported better-than-expected earnings and same-store sales growth, Setyan said in a note. “April SSS growth commentary ahead of Q2 consensus as positive traffic continues,” he added.

“We believe CMG is poised to see accelerated market share gains in a post-COVID environment, resulting in sustained growth above pre-COVID levels,” the analyst further wrote.

CMG Price Action: Shares of Chipotle Mexican Grill were trading 14.38% higher to $2,036.03 late Wednesday morning. 

Photo via Shutterstock.