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Will Chipotle’s 1Q18 Earnings Boost Its Stock Price?

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Apr. 16 2018, Published 4:04 p.m. ET

Stock performance

Chipotle Mexican Grill (CMG) is scheduled to post its 1Q18 earnings after the market closes on April 25. As of April 13, Chipotle was trading at $318.36, which represents growth of 4.6% since the announcement of its 4Q17 earnings on February 6, 2018.

In 4Q17, Chipotle posted adjusted EPS (earnings per share) of $1.34 on revenues of $1.11 billion. Analysts were expecting the company to post EPS of $1.32 on revenues of $1.11 billion. Although Chipotle had posted better-than-expected 4Q17 earnings, the company’s stock price fell due to weak outlook provided by the company’s management for 2018. The company’s stock price declined to as low as $249.31 on February 12.

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However, the appointment of Brian Niccol and Chris Brandt as the company’s new CEO and chief marketing officer appears to have increased investors’ confidence, leading to a rise in the company’s stock price. Niccol was instrumental in launching Taco Bell’s breakfast offerings and implementing mobile ordering and payment across 7,000 restaurants in the United States. Brandt had worked with Brian Niccol at Taco Bell, where he led the chain’s marketing efforts.

Year-to-date performance

Chipotle had a tough 2017. Its stock price declined 23.4%. However, since the beginning of 2018, the stock price has increased 10.1%. Chipotle’s peers Shake Shack (SHAK) and The Cheesecake Factory (CAKE) have returned 8.3% and 0.6%, year-to-date, respectively. Also, the broader comparative indices, the S&P 500 Index (SPX) and the Consumer Discretionary Select Sector SPDR Fund (XLY), have returned -0.6% and 2.6%, respectively.

Series overview

With Chipotle’s 1Q18 earnings around the corner, we’ll look at analysts’ revenue and EPS expectations for 1Q18. Also, we’ll cover management’s guidance and analysts’ estimates for 2018. Finally, we’ll end the series by looking at Chipotle’s valuation multiple and analysts’ recommendations.

Let’s start by looking at analysts’ revenue estimate for 1Q18.

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