Benzinga - by Priya Nigam, Benzinga Staff Writer.
Chipotle Mexican Grill, Inc. (NYSE:CMG) shares were climbing in early trading on Thursday, after the company reported higher-than-expected sales and earnings for its first quarter.
The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.
TD Cowen On Chipotle Mexican Grill Analyst Andrew Charles reiterated a Buy rating while raising the price target from $3,400 to $3,500.
Chipotle Mexican Grill delivered a "standout" quarterly performance, with trend persisting in April, Charles said in a note.
Management raised the 2024 same-store sales guidance to MSD%-HSD%, despite the "challenging industry sales backdrop," the analyst stated.
He added, "Our seasonality analysis suggests 2024 SSS guidance will ultimately be raised to HSD%."
Oppenheimer On Chipotle Mexican Grill Analyst Brian Bittner maintained an Outperform rating while lifting the price target to $3,300.
Chipotle Mexican Grill reported a beat across same-store sales, margins and earnings, Bittner said.
"Traffic trends into 2Q remain impressive at mid-single-digits despite a challenging industry environment," he added.
"Management indicated 2Q SSS should be highest of the year with traffic sustaining mid-single-digits, menu pricing of ~3.5% (from 2.7-2.8% in 1Q) and a ~100bps benefit from calendar shifts," the analyst wrote. The company is in league of their own, he further stated.
Wedbush On Chipotle Mexican Grill Analyst Nick Setyan reaffirmed a Neutral rating while raising the price target from $2,850 to $3,200.
Chipotle Mexican Grill reported adjusted earnings of $13.37 per share, significantly higher than the consensus estimate of $11.67 per share, driven by same-store sales growth of 7.0% versus expectations of 5.0%, Setyan said.
"UL margin of 27.5% was above consensus of 26.1%, driven by sales leverage," he added.
"We continue to believe CMG is poised to sustain accelerated market share gains in a post-COVID environment, resulting in sustained growth above pre-COVID levels," the analyst further wrote.
KeyBanc Capital Markets On Chipotle Mexican Grill Analyst Eric Gonzalez reiterated an Overweight rating, while raising the price target from $3,250 to $3,400.
The company's earnings and same-store sales beats were driven by "industry-leading transaction growth," Gonzalez said. "Chipotle continues to expect 285-315 new stores this year and ~10% by 2025," he added.
"We reiterate our Overweight rating as we maintain that Chipotle's digital capabilities, brand positioning, and marketing/innovation expertise provide for best-in-class unit returns and a unique level of resilience that is worth a premium relative to its peers," the analyst further wrote.
Check out other analyst stock ratings.
Piper Sandler On Chipotle Mexican Grill Analyst Brian Mullan maintained a Neutral rating while lifting the price target from $2,442 to $3,070.
"We think the results were punctuated by transaction growth of +5.4%, which is just so far in excess of what the industry is doing, that we have to just pause and tip our caps to management," Mullan wrote in a note.
"On the call, management indicated that its throughput initiatives continue to bear fruit (no surprise); but building on that, commentary was very encouraging around the idea that there could be a multi-year tailwind to the benefits here," he added.
Stephens On Chipotle Mexican Grill Analyst Jim Salera reaffirmed an Equal-Weight rating while raising the price target from $3,010 to $3,050.
While Chipotle Mexican Grill reported mostly stronger-than-expected results for the first quarter, one exception cane from "a unit miss vs. consensus, although it was in-line with our proprietary unit tracker," Salera said. "CMG communicated that 2Q24 comps will likely be the high-water mark for FY24 driven by a shift in the Easter holiday," he added.
The company appears to be well-positioned to "offset the longer-term impact from rising labor costs through a balance of menu price, technology/automation investments, and operational execution initiatives," the analyst wrote.
Raymond James On Chipotle Mexican Grill Analyst Brian Vaccaro reiterated an Outperform rating while raising the price target from $3,300 to $3,340.
"The company is driving powerful traffic share gains (+5.4% y/y vs. industry down y/y), and we see tangible comp drivers supporting management's raised ‘24 comp guide (up mid-to-high SD%)," Vaccaro said.
While traffic was better in February and March than January, "mix was down 100 bp, but reflected an encouraging recent increase in add-ons (group size still down y/y)," he added.
CMG Price Action: Shares of Chipotle Mexican Grill had risen by 4.98% to $3,072.50 at the time of publication on Thursday.
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Latest Ratings for CMG
| Feb 2022 | Morgan Stanley | Maintains | Overweight | |
| Feb 2022 | Deutsche Bank | Maintains | Hold | |
| Feb 2022 | Barclays | Maintains | Equal-Weight |
View the Latest Analyst Ratings
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