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Investing.com - Citi raised its price target on Chipotle Mexican Grill (NYSE:CMG) to $68.00 from $65.00 on Thursday, while maintaining a Buy rating on the stock. The new target represents a potential 21.6% upside from current levels, though InvestingPro data indicates the stock is trading at a high P/E ratio of 48.9x and appears overvalued based on its Fair Value model.
The firm expects the second quarter to mark the low point for Chipotle’s one-year traffic and same-store sales as the company moves beyond difficult comparisons and implements sales initiatives in the second half of the year. With the next earnings report due on July 23rd and a strong financial health score from InvestingPro, investors will be closely watching the company’s performance metrics.
These initiatives include new products, increased marketing efforts, and store productivity tools, which Citi believes will help drive growth beginning as early as the third quarter of 2025.
Citi addressed bearish concerns about Chipotle’s ability to return to mid-single-digit comparable sales growth in fiscal year 2026 and beyond, expressing confidence that several factors will support this growth trajectory.
The firm specifically cited an increasing cadence of menu news including limited-time offers and new items, greater marketing spend potentially increasing from 3% to 4% over time, deployment of new kitchen equipment, likely pricing increases of about 2% in December, and the potential of catering, which currently represents 1.5% of the sales mix.
In other recent news, Chipotle Mexican Grill has been the focus of several analyst reports. Truist Securities raised its price target for Chipotle to $64, maintaining a Buy rating, citing improved sales, particularly after the launch of the "Adobo Ranch" offering. Meanwhile, TD Cowen reiterated a Buy rating with a $57 price target, expressing confidence in Chipotle’s strategy despite industry challenges and noting stable new store performance. Redburn-Atlantic initiated coverage with a Neutral rating and a $55 price target, acknowledging Chipotle’s strong market position but noting that current market expectations limit potential upward revisions.
Stephens maintained an Equal Weight rating with a $49 target, highlighting the strategic launch of Adobo Ranch to attract younger consumers and enhance customer engagement. JPMorgan adjusted its price target down to $54 from $58, keeping a Neutral rating due to expectations of a sales rebound in future quarters. Each firm provides varying perspectives on Chipotle’s financial performance and market potential, with a focus on recent product innovations and strategic initiatives. Despite differing price targets and ratings, analysts generally recognize Chipotle’s efforts to navigate current market conditions and its potential for growth.
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