Raymond James analyst Brian M. Vaccaro reiterated an Outperform rating on the shares of Chipotle Mexican Grill Inc CMG and raised the price target from $67 to $70.
The company recently announced a 50-for-1 stock split.
According to data, the company is sustaining strong comp and traffic outperformance despite contending with viral social media posts questioning its portion sizes and a softer consumer backdrop, said the analyst.
Chipotle's expected mid-single digit percentage y/y traffic growth remains a standout in today's environment due to its strong relative value proposition, noted the analyst.
The analyst notes Chipotle is well positioned to sustain positive traffic in the current environment, given continued throughput gains and improved operations.
Longer-term, the analyst remains bullish on potential ops/margin benefits from new equipment/ tech currently in test and the company's long-term unit growth outlook supported by best-in-class unit economics.
The analyst expects 2Q24 revenue to increase nearly 17% y/y to $2.94 billion, reflecting comps +9.0%.
The analyst's new 2024 EPS estimate of $1.10 (+22% y/y) reflects an average fully diluted share count of 1.38 billion shares.
The analyst is modeling second-quarter store margins +125 basis points y/y to 28.7%, reflecting sales leverage and lower marketing costs.
Price Action: CMG shares are trading lower by 0.30% at $62.21 at last check Friday.
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