After Chipotle Mexican Grill (CMG) posted better-than-expected first-quarter earnings on April 24, several analysts raised their target prices.
- J.P. Morgan from $550 to $600
- BMO from $540 to $675
- SunTrust Robinson from $770 to $780
- Wedbush from $680 to $700
- Cowen and Company from $640 to $660
- BTIG from $700 to $790
- Piper Jaffray from $755 to $760
Among the 31 analysts covering Chipotle, 32.3% recommended a “buy,” 51.6% recommended a “hold,” and 16.1% recommended a “sell.” Analysts have set a 12-month target price of $670.42 for the stock, which represents a fall of 1.1% from its stock price of $678.07 on April 25.
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Among the 11 analysts covering Shake Shack (SHAK), 27.3% recommended a “buy,” 63.6% recommended a “hold,” and 9.1% recommended a “sell.” On average, analysts have given Shake Shack a 12-month target price of $52.44, which implies a potential fall of 13.8% from its stock price of $60.85.
Among the 30 analysts covering McDonald’s (MCD), 80% recommended a “buy,” while 20% recommended a “hold.” On average, analysts have given McDonald’s a 12-month target price of $202.04—a potential upside of 2.1% from its stock price of $197.93.
The discloser of the new subpoena from the U.S. District Court for the Central District of California related to foodborne illness in July 2018 appears to have led to a fall in Chipotle’s stock price, which lowered its valuation multiple. As of April 25, the company was trading at a forward PE ratio of 48.2x compared to 52.2x before the disclosure. In comparison, Shake Shack and McDonald’s were trading at forward PE ratios of 95.0x and 23.8x, respectively.