What Are Analysts Recommending for Chipotle and Shake Shack?

Chipotle Mexican Grill

Of the 31 analysts that cover Chipotle Mexican Grill (CMG), 35.5% are favoring a “buy,” while 48.4% have given the stock a “hold,” and 16.1% have given it a “sell” recommendation. On average, analysts have set a 12-month price target of $557.25 on the stock, which implies a fall of 15.0% from its stock price of $655.80 on March 18.

What Are Analysts Recommending for Chipotle and Shake Shack?

Both Piper Jaffray and BTIG raised their price targets this month. On March 18, Piper Jaffray raised its price target from $661 to $725, while BTIG raised its price target from $620 to $700 on March 13. In February, Cowen and Company, J.P. Morgan, Morgan Stanley, Jefferies, Stifel, Barclays, BMO, SunTrust Robinson, and Bernstein all raised their price targets.

Shake Shack

Of the total 12 analysts that cover Shake Shack (SHAK), 33.3% are recommending a “buy,” while 50.0% have given the stock a “hold” rating and 16.7% have given it a “sell” recommendation. On average, analysts have set a 12-month price target of $50.82 on the stock, which implies a fall of 7.4% from its stock price of $54.89 on March 18.

Since the announcement of Shake Shack’s fourth-quarter earnings on February 25, SunTrust Robinson has raised its price target from $56 to $58, while Stifel, Wedbush, and Piper Jaffray have cut their price targets. Stifel has lowered its price target from $55 to $45, Wedbush has lowered its price target from $56 to $54, and Piper Jaffray has lowered its price target from $62 to $59.

Valuation multiple

As of March 18, Chipotle was trading at 53.3 times analysts’ 2019 EPS estimate of $12.30, and 42.3 times analysts’ 2020 EPS estimate of $15.51 with its EPS expected to rise by 35.7% in 2019 and 26.1% in 2020.

On the same day, Shake Shack was trading at 92.3 times analysts’ 2019 EPS estimate of $0.60, and 75.5 times analysts’ 2020 EPS estimate of $0.73 with its EPS expected to fall by 16.2 times in 2019 and rise by 22.3 times in 2020. Shake Shack is still in the growth phase of its business cycle. So, it has a huge scope to expand, which has led to a higher valuation multiple.

Next, we’ll look at analysts’ expectations from Chipotle in 2019.