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Chipotle’s Stock Price Rises after Stifel Raises Its Price Target

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Stock performance

Stifel’s raising of its price target for Chipotle Mexican Grill (CMG) appears to have led to a rise in Chipotle’s stock price. 

As of 10:30 AM EDT on April 5, Chipotle was trading 0.4% higher than its previous day’s closing price.

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Year-to-date performance

YTD (year-to-date), Chipotle stock has returned 62.9% as of April 4. The company’s strong performance in the fourth quarter and investors’ optimism about its implementation of digital advancements have likely contributed to the rise in its stock price. 

YTD, its peers Shake Shack (SHAK) and McDonald’s (MCD) have returned 31.0% and 6.9%, respectively. The Consumer Discretionary Select Sector SPDR ETF (XLY), which invests 7.9% of its holdings in restaurant and travel companies, has returned 18.7% YTD.

Analysts’ estimates

For 2019, analysts expect Chipotle to post revenue of $5.30 billion, a rise of 8.9% from $4.86 billion in 2018. During the same period, Chipotle’s EPS are expected to rise 36.2% to $12.34.

Valuation multiple

The increase in Chipotle’s stock price since the beginning of 2019 has also raised its valuation multiple. As of April 4, the company has a forward PE multiple of 53.5x compared to 36.1x at the beginning of 2019. In comparison, Shake Shack and McDonald’s have forward PE multiples of 94.0x and 22.9x, respectively.

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