Chipotle Mexican Grill 'Stands Out From The Crowd': 6 Analysts Take Bite Into Q3 Results

Chipotle Mexican Grill, Inc. CMG shares continued to climb in early trading on Friday, after adding more than 5% in Thursday’s extended trading session on third-quarter earnings.

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

KeyBanc Capital Markets On Chipotle Mexican Grill

Analyst Eric Gonzalez maintained an Overweight rating while raising the price target from $2,200 to $2,250.

Chipotle Mexican Grill reported its earnings, same-store sales growth and store-level margins higher than expectations, “as traffic trends improved throughout the period,” Gonzalez said in a note.

“In addition, SSS growth is projected to accelerate to the mid-to high-single-digit range in 4Q23 and sustain at that level in 2024 with the help of a recent price increase,” he added.

Goldman Sachs On Chipotle Mexican Grill

Analyst Jared Garber reiterated a Buy rating while lifting the price target from $1,840 to $1,860.

“Chipotle reported 3Q22 earnings in which SSS of +7.6% beat GS/Consensus Metrix estimates, while unit growth of 6.8% was below expectations as macro challenges (construction, equipment availability) remain a headwind to near-term unit development,” Gonzalez wrote in a note.

“4QTD SSS are running in the MSD range in Oct; however, management guided to 4Q SSS of MSD-HSD as the company expects the yoy headwinds from menu innovation to ease in November when Smoked Brisket sold out last year and an incremental 50bps of net price that was taken earlier in October flows through,” he added.

Oppenheimer On Chipotle Mexican Grill

Analyst Brian Bittner reaffirmed an Outperform rating and price target of $2,225.

“We believe CMG will stand out from the crowd when restaurant earnings season is finalized with a 3Q23 beat on SSS, margins and EPS,” Bittner said. There is upside to the current Wall Street expectations for 2024 earnings, he added.

“Importantly, traffic comps into 4Q are trending up mid-singles and pricing actions into 2024 are already outpacing consensus,” the analyst further wrote.

Check out other analyst stock ratings.

Stephens On Chipotle Mexican Grill

Analyst Joshua Long maintained an Overweight rating and price target of $2,330.

Chipotle Mexican Grill continued to perform well “among lower-, middle-, and upper-income consumers,” Long said. “Thus far, trends in early 4Q23 are supported by +MSD% transactions and expected to be in the +MSD % to +HSD% range for the quarter,” he added.

The company remained “the preeminent large cap growth restaurant name” and is well-positioned to “continue driving compelling sales and unit growth globally, leverage operational enhancements to further strengthen profitability, and return capital to shareholders,” the analyst further wrote.

Wedbush On Chipotle Mexican Grill

Analyst Nick Setyan reiterated an Outperform rating and price target of $2,200.

The company delivered an earnings beat, driven by “better-than-expected SSS growth and UL margin,” Setyan said. Management guided to solid same-store sales growth for the fourth quarter, “as the Carne Asada LTO sustains transaction growth,” he added.

“Transaction trends accelerated throughout Q3, and the strength has continued into October,” the analyst wrote. “Q4 margin commentary could prove conservative again,” he added.

William Blair On Chipotle Mexican Grill

Analyst Sharon Zackfia reaffirmed an Outperform rating on the stock.

“Traffic trends have accelerated to the mid-single-digit range in October, bolstered by the return of Carne Asada (launched mid-September to a customer reception that surpassed internal expectations) versus last year’s underperforming Garlic Guajillo Steak LTO,” Zackfia said.

The company’s fourth-quarter comps are expected in the mid- to high-single-digit range “inclusive of about 3% of recent price (which will benefit full-quarter comps by just over two percentage points),” the analyst wrote. “Strength is occurring across all income demographics, and the company noted it has seen no impact from GLP-1 drugs nor does it expect to given the customizability of its menu,” he added.

CMG Price Action: Shares of Chipotle Mexican Grill had risen by 5.96% to $1,914.18 at the time of publication Friday.

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