Skip to main content

Market Overview

Piper Jaffray Is Craving Chipotle In 2020

Share:
Piper Jaffray Is Craving Chipotle In 2020

Chipotle Mexican Grill, Inc. (NYSE: CMG) will close 2019 the same way it started the year as a "top pick" stock at Piper Jaffray.

The Analyst

Nicole Miller Regan maintains an Overweight rating on Chipotle's stock with a $904 price target.

The Thesis

The bullish case for making Chipotle a preferred investment idea in 2020 is based on three catalysts, Miller Regan wrote in a note.

First, the restaurant chain is poised to deliver near-term comp beats after recent first-hand checks point to a potential top-line growth in the mid-single digit range in the fourth quarter. The company could report same-store sales growth as high as 10%, which is above the current consensus estimate of 9.3%.

Second, Chipotle restaurant offers superior unit-level economics compared to its peers. For example, when the restaurant hit trough levels in 2016 its average unit volume (AUV) was still in-line with other fast casual rivals. The company's "middle-of-the-road" $11 average transaction coupled with expectations for AUV growth in the coming year, AUV and unit-level return metrics could become "even more impressive."

Finally, the "contrarian" bullish call for 2020 is based on expectations for earnings per share to rise to $25 to $30 in 2021. The undiscounted value at current levels implies a 75% upside potential based on current multiples.

Price Action

Shares of Chipotle traded around $834.50 Monday morning.

Related Links:

Here's What Drive-Thrus Mean For Chipotle Investors

Which Restaurant Stocks Is RBC Hungry For?

Photo credit: Chis Potter, Flickr

Latest Ratings for CMG

DateFirmActionFromTo
Feb 2022Morgan StanleyMaintainsOverweight
Feb 2022Deutsche BankMaintainsHold
Feb 2022BarclaysMaintainsEqual-Weight

View More Analyst Ratings for CMG

View the Latest Analyst Ratings

 

Related Articles (CMG)

View Comments and Join the Discussion!

Posted-In: food Nicole Miller Regan Piper JaffrayAnalyst Color Restaurants Analyst Ratings General Best of Benzinga

Latest Ratings

StockFirmActionPT
SEDGB of A SecuritiesMaintains411.0
PTLOPiper SandlerMaintains28.0
AOUTLake StreetMaintains26.0
RAPTPiper SandlerMaintains52.0
OCXLake StreetMaintains6.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com