BTIG maintains buy on Chipotle, adjusts price target to $67 following stock split By Investing.com

Thursday, BTIG reaffirmed its Buy rating on Chipotle Mexican Grill (NYSE:) with a new price target of $67, following the company’s recent 50:1 stock split. The updated target reflects an adjustment from the previous $3,350, aligning with the split’s effect on share value.

The firm has modified its 2024 and 2025 earnings per share (EPS) estimates for Chipotle to $1.15 and $1.37, down from $57.37 and $68.38 respectively. This change accommodates the increased number of shares resulting from the stock split. BTIG emphasized that there have been no changes to sales, margins, or earnings forecasts in this revision, only to the EPS and price target to account for the stock split.

The analyst expressed continued optimism for Chipotle’s performance, highlighting that second-quarter sales and customer traffic in 2024 have surpassed those of the first quarter. Several factors were credited for this growth, and expectations are set for year-end same-store sales to potentially reach the higher end of the company’s projections.

Chipotle’s sustained momentum has been noted, with the belief that it has the potential to persist for years. The drivers of this momentum are seen as both near-term and long-term, suggesting a strong outlook for the company’s future.

In other recent news, Chipotle Mexican Grill has seen a series of significant developments. The company reported a 7% increase in comparable sales growth and total sales of $2.7 billion for the first quarter of fiscal 2024, with digital sales accounting for 37% of the total. In addition, Chipotle plans to open between 285 to 315 new restaurants throughout the year.

Argus recently raised its price target for Chipotle to $3,888 from $3,668, maintaining a Buy rating, and highlighting the company’s strong financial position and effective mobile ordering and delivery platforms. Goldman Sachs also initiated coverage of Chipotle with a Buy rating and set a price target of $3,730.00, emphasizing the company’s ability to grow its average unit volume and scale its business efficiently.

In other company news, Chipotle shareholders approved a historic 50-for-1 stock split aimed at making the company’s stock more accessible to a broader investor base. The company also announced a special one-time equity grant for its longstanding employees.

Lastly, the New York Stock Exchange is currently investigating a technical issue that caused temporary trading halts of several NYSE-listed stocks, including Chipotle.

InvestingPro Insights

With BTIG’s reaffirmed Buy rating and a new price target for Chipotle Mexican Grill, investors are keenly observing the company’s valuation and performance metrics. According to InvestingPro data, Chipotle boasts a robust market capitalization of $90.45 billion and has demonstrated a significant revenue growth of 13.61% over the last twelve months as of Q1 2024. The company’s impressive revenue growth aligns with the analyst’s optimism and the observed sales momentum.

An InvestingPro Tip notes that Chipotle is trading at a high earnings multiple, with a current P/E ratio of 69.53. This is paired with a high Price / Book ratio of 26.91, reflecting a premium valuation in the market. Despite this, Chipotle’s strong revenue growth and solid operating income margin of 16.34% suggest that investors are confident in the company’s ability to generate profits. Additionally, Chipotle’s cash flows can sufficiently cover interest payments, indicating a healthy financial position.

For those looking to delve deeper into Chipotle’s financials and future outlook, InvestingPro offers additional metrics and tips. There are 15 more InvestingPro Tips available that can provide investors with a comprehensive analysis of Chipotle’s financial health and growth prospects. To access these insights and take advantage of a special offer, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

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