Chipotle's Strong 4Q Impresses Analysts, Wunderlich Raises PT

In a report published Friday, Wunderlich Securities analyst Robert Derrington maintained a Hold rating on Chipotle Mexican Grill (NYSE: CMG) and raised the price target from $500.00 to $542.00 following strong fourth quarter results.

Chipotle reported better than expected revenue, SSS, and margins. Fourth quarter revenue was reported at $844.1 million, driven by better than expected traffic and same store sales. Same store sales were up 9.3% versus the analyst's 7.0% estimate. EPS was reported at $2.53 versus Wunderlich's $2.42 estimate and the Street's $2.52. Operating margin increased 70bps to 15.3%, dragged down by 70bps higher G&A expense.

Chipotle's management updated 2014 guidance. SSS is now expected to reach low-to-mid-single digits from low-single digits. Store growth is guided to 11-12% and new store average unit sales is expected to be within $1.6-1.7 million. Menu price increase is expected to be within 3-5% and will likely occur in mid-2014.

Wunderlich lowered their 2014 and 2015 EPS for Chipotle from $12.90 to $12.70, and from $15.80 to $15.40, respectively. The lowered estimates are to reflect higher G&A and food inflation.

Shares of Chipotle closed at $493.96 and are currently trading up 10.94% at $548.00 shortly after the opening bell.