After Credit Suisse’s “outperform” rating on June 25, Chipotle Mexican Grill (CMG) stock rose to a high of $739.96. However, the stock lost some of its gains due to weakness in the broader equity market. The stock was trading at $734.36 as of 12:10 PM ET, which implies a rise of 1.4% from the previous day’s closing price.
Chipotle has returned 67.7% year-to-date as of June 24. The stock has outperformed the broader equity market and its peers. During the same period, the S&P 500 Index rose 17.5%. McDonald’s (MCD) and Shake Shack (SHAK) have returned 14.8% and 46.9%, respectively.
The impressive performance in the fourth quarter of 2018 and the first quarter and investors’ optimism surrounding Chipotle’s initiatives appear to have contributed to the rise in its stock price.
The increase of 67.7% in Chipotle’s stock price since the beginning of 2019 has raised its valuation multiple. As of June 24, Chipotle was trading at a forward PE ratio of 48.9x compared to 36.1x at the beginning of 2019. In comparison, McDonald’s and Shake Shack were trading at forward PE ratios of 24.4x and 104.5x, respectively.
On June 24, Chipotle was trading at 55.4x analysts’ 2019 EPS estimate of $13.06 and at 43.1x analysts’ 2020 EPS estimate of $16.80. Chipotle’s EPS is expected to rise 44.2% in 2019 and 28.6% in 2020.