KeyBanc cuts Chipotle stock price target to $58, keeps overweight

On Thursday, KeyBanc Capital Markets adjusted its outlook on Chipotle Mexican Grill (NYSE:CMG) shares, reducing the price target to $58 from $60, while maintaining an Overweight rating on the stock. According to InvestingPro data, the stock currently trades at a P/E ratio of 43.29x, reflecting premium valuation metrics, with 18 analysts recently revising their earnings expectations downward for the upcoming period. The adjustment followed Chipotle’s first-quarter earnings for 2025, which surpassed earnings per share (EPS) expectations due to strong margins, despite a slight same-store sales (SSS) decline of 0.4%, which fell short of the anticipated 1.6% increase.

The company’s SSS trends continued to face challenges into April, attributed partly to the shift in the Easter holiday, as well as a general pullback in consumer discretionary spending. Despite these pressures, KeyBanc expressed confidence in Chipotle’s strategic plan to bolster its performance. The plan includes ramping up marketing efforts, introducing new items to the menu, and enhancing in-store execution. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.52 and operates with moderate debt levels, suggesting adequate resources to execute its strategic initiatives.

KeyBanc’s revised price target of $58 reflects a more conservative outlook due to the direct impact of tariffs and a tougher top-line environment. Additionally, the firm has lowered its EPS estimate for Chipotle in 2025 to $1.21. However, KeyBanc reiterated its Overweight rating, signaling a continued belief in the long-term growth potential of the Chipotle brand.

The research firm’s price target is based on a multiple of 40 times its projected EPS for 2026. Despite the near-term headwinds, KeyBanc’s stance suggests that the firm views these challenges as temporary and believes in the company’s ability to navigate through the current market conditions. The Overweight rating indicates that KeyBanc expects Chipotle’s stock to outperform the average return of the stocks that the firm covers over the next 12 to 18 months. With analyst targets ranging from $46 to $72, and 12 additional key insights available on InvestingPro, investors can access comprehensive analysis including detailed valuation metrics and growth projections in the Pro Research Report.

In other recent news, Chipotle Mexican Grill reported its Q1 2025 earnings, revealing an earnings per share (EPS) of $0.29, which aligned with analyst expectations. However, the company faced a revenue shortfall, reporting $2.88 billion compared to the forecasted $2.98 billion. This revenue miss has raised concerns about the company’s ability to maintain its sales momentum, especially given the current economic uncertainty affecting consumer spending. Despite these challenges, Chipotle’s digital sales made up 35.4% of total sales, indicating a significant portion of their business. The company plans to counteract these challenges by increasing marketing efforts and opening 315-345 new restaurants in 2024. Additionally, Chipotle anticipates low single-digit full-year comparable sales growth and expects positive transaction growth in the latter half of the year. On the analyst front, firms like TD Cowen have been closely monitoring Chipotle’s strategic initiatives and market performance. The company continues to focus on expanding its brand presence internationally, with plans to open new restaurants in Canada and a new partnership in Mexico.

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