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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