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On Thursday, Bernstein analysts maintained a bullish stance on Chipotle Mexican Grill (NYSE:CMG) shares, reiterating an Outperform rating and a $60.00 price target. Despite a challenging first quarter in 2025, which saw Chipotle’s same-store sales growth (SSSG) fall short of expectations at -0.4% versus the anticipated 1.7%, Bernstein remains optimistic about the company’s long-term prospects. The company, currently valued at $66.9 billion, has seen 18 analysts revise their earnings expectations downward for the upcoming period, according to InvestingPro data.
The first quarter of 2025 proved difficult for Chipotle, with the company not only missing its same-store sales growth targets but also reducing its forward guidance. Bernstein analysts had previously considered Chipotle to be somewhat immune to economic downturns, but the widespread impact of low macroeconomic sentiment proved otherwise, affecting comparable sales by 2-3%. Despite these challenges, the company maintains strong fundamentals with a healthy gross profit margin of 40.54% and a solid current ratio of 1.52.
Despite the setback, Bernstein analysts believe that the core fundamentals of Chipotle’s business remain strong. They commented that while the current negative cycle is affecting the company, they expect it to pass. They anticipate that Chipotle will emerge with an even stronger market share, attributed to improved value for money and in-store execution. The company’s impressive return on equity of 46% and revenue growth of 14.61% support this optimistic outlook.
Investors’ concerns about a fundamental decay in Chipotle’s business were somewhat alleviated by the company’s resilient margins, which increased slightly by 10 basis points compared to the previous fiscal year. Additionally, menu innovation continues to contribute positively, with the introduction of honey chicken expected to provide a 100-200 basis points lift, on top of the success of chicken al pastor. According to InvestingPro, the company’s overall financial health score is rated as GOOD, with particularly strong profitability metrics. For deeper insights into Chipotle’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Bernstein analysts also highlighted Chipotle’s solid cash-on-cash returns, which remain at a robust 60% over two years. This strong performance supports the company’s strategy to continue expanding its store count by 8-10% annually, even after considering the impact of tariffs. Trading at a P/E ratio of 43.36, the stock currently appears to be trading near its Fair Value based on InvestingPro analysis.
In other recent news, Chipotle Mexican Grill has seen a series of adjustments in analyst price targets and ratings following its first-quarter earnings report for 2025. TD Cowen reduced its price target for Chipotle from $60 to $57 but maintained a Buy rating, citing new sales initiatives and a strategic response to macroeconomic challenges. RBC Capital Markets also lowered its price target from $65 to $60, maintaining an Outperform rating, and noted that the company’s first-quarter results fell short of expectations due to macroeconomic factors. BMO Capital Markets kept its Market Perform rating with a price target of $56, acknowledging Chipotle’s ability to exceed earnings per share expectations despite a decline in customer traffic.
Piper Sandler adjusted its price target down to $52 from $59, maintaining a Neutral rating, and pointed out a 0.4% decline in same-store sales for the first quarter. Stephens also revised its price target to $49 from $54, retaining an Equal Weight rating, and highlighted Chipotle’s strong restaurant-level margins despite challenges in same-store sales. Across these analyses, there is a common theme of cautious optimism for Chipotle’s performance in the latter half of the year, contingent on a stable consumer spending environment. Chipotle’s management has expressed expectations of a positive turnaround in sales by June, with potential transaction growth in the second half of the year. These developments reflect the broader challenges and opportunities within the restaurant industry as Chipotle navigates through economic headwinds.
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