Chipotle Mexican Grill Stock Tumbles: 5 Analysts Deep Dive Into Q2 Print, Q3 Outlook

Shares of Chipotle Mexican Grill, Inc. CMG tanked in early trading on Thursday, after the company reported downbeat quarterly results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Wedbush On Chipotle Mexican Grill

Analyst Nick Setyan maintained an Outperform rating, while reducing the price target from $2,300 to $2,200.

Chipotle Mexican Grill reported its second-quarter earnings above expectations “on better-than-expected UL margin,” Setyan said in a note. The company’s third-quarter margin and same store sales growth guidance came in below consensus “as pricing wears off,” he added.

“We continue to 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 wrote.

KeyBanc Capital Markets On Chipotle Mexican Grill

Analyst Eric Gonzalez reiterated an Overweight rating, while cutting the price target from $2,300 to $2,200.

The company’s third-quarter outlook came in below Street expectations, “as SSS growth is projected to moderate to the LSD-MSD range and store level margins are likely to be pressured from labor/rising avocado costs,” Gonzalez said.

“In addition, G&A expenses are expected to tick higher to fund technology/international development,” the analyst wrote. He added, however, that Chipotle Mexican Grill’s “digital capabilities, brand positioning, and marketing/innovation expertise provide…a unique level of resilience that is worth a premium relative to its peers.”

Check out other analyst stock ratings.

RBC Capital Markets On Chipotle Mexican Grill

Analyst Christopher Carril reaffirmed an Outperform rating, while reducing the price target from $2,300 to $2,250.

“Roughly in-line top-line and slightly better restaurant-level margins helped drive a modest 2Q EPS beat ($12.65, vs. consensus $12.27), but softer 3Q comp/margin guide weighed on shares in after-hours trading,” Carril wrote in a note.

“While traffic trends will come back into focus for CMG, we see forthcoming LTO and potential for incremental pricing later this year setting up CMG for comp acceleration against easier 4Q comparisons,” he added.

Stephens On Chipotle Mexican Grill

Analyst Joshua Long maintained an Overweight rating and price target of $2,400.

Chipotle Mexican Grill’s second-quarter results were “strong overall,” while being “somewhat mixed vs. expectations,” Long said. “Traffic was positive in 2Q however waning menu price benefit led to comps coming in a touch below expectations,” he added.

“3Q23 same-store sales guidance of +LSD% to +MSD% (vs. consensus of +6.1%) and expectations for lower store-level margins and higher G&A levels in 2H23 (relative to expectations) could lead to the stock being pressured in the next trading session,” the analyst wrote.

Oppenheimer On Chipotle Mexican Grill

Analyst Brian Bittner reiterated an Outperform rating and price target of $2,300.

Chipotle Mexican Grill’s stock came under pressure due to management’s third-quarter outlook, Bittner said.

“Despite the minor speed bump, we believe the near-term outlook does not have red flags and the business remains strong with positive traffic, improving margins and optionality to take more menu pricing,” he added.

CMG Price Action: Shares of Chipotle Mexican Grill were down 9.3% to $1,890.09 at the time of publication Thursday.

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