Market Pulse
Chipotle upgraded at RBC based on potential for thousands more restaurant locations
Chipotle Mexican Grill Inc. (CMG) was upgraded to outperform from sector perform at RBC Capital Markets based on a number of factors that could grow the business, including the potential to expand the company by thousands of restaurant locations. RBC raised its price target to $1,650 from $1,320. Chipotle has an average price target of $1,461.31, based on 33 analysts polled by FactSet. The stock closed Wednesday at $1,395. "[W]e see the greatest upside near-term from reaccelerating unit growth, setting Chipotle further along the path to 6,000+ restaurants, from 2,700 today," the note said. "Management noted recently that its pipeline for new restaurant expansion approximates 200 units this year, up from <150 annual openings in recent years." Chipotle has discussed the addition of drive-thru Chipotlanes at new and existing locations, which could lead to a breakfast test (http://www.marketwatch.com/story/chipotles-drive-thru-lanes-could-clear-a-path-for-a-breakfast-menu-11610127240). Menu innovation is another factor mentioned in RBC's upgrade. Chipotle has recently introduced cilantro-lime cauliflower rice (http://www.marketwatch.com/story/mcdonalds-shake-shack-among-the-restaurant-chains-kicking-off-2021-with-new-menu-additions-11609960270). Chipotle stock has rallied 62.4% over the last year while the S&P 500 index is up 16% for the period.
-Tonya Garcia; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
January 14, 2021 09:07 ET (14:07 GMT)
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