Bullish indicating open at $55-$60, IPO prices at $37
On Friday, Loop Capital Markets shifted its stance on Chipotle Mexican Grill (NYSE:CMG), upgrading the stock from Hold to Buy and increasing the price target from $58.00 to $65.00. The upgrade is grounded on the firm’s projection of a 35 times multiple on the 2025 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) estimate. According to InvestingPro data, CMG currently trades at an EV/EBITDA multiple of 29.8x, with a P/E ratio of 43.7x, reflecting its premium valuation status.
Stifel analysts cite the potential for Chipotle’s comparable sales to surpass expectations throughout the current year as a key factor for the upgrade. They anticipate a 7.0-8.0% rise above the current consensus earnings per share (EPS) estimate of $1.30 for 2025. The company has demonstrated strong growth momentum, with revenue increasing by 14.6% in the last twelve months and maintaining a healthy gross profit margin of 40.5%.
The optimism towards Chipotle’s stock is also due to a perceived buying opportunity following a recent pullback in share prices. Since the publication of Loop Capital’s focus report on February 19, 2025, Chipotle’s shares have experienced a nearly 10% decline. This pullback is seen as an attractive entry point for investors. InvestingPro analysis reveals the stock is trading near its 52-week low, with 17 additional exclusive ProTips available to subscribers for deeper market insights.
The focus report from last month had already hinted at the upside potential for Chipotle’s earnings, and the recent price movement has only bolstered Loop Capital’s confidence in the stock’s prospects.
Chipotle’s stock upgrade reflects Loop Capital’s positive outlook on the company’s future financial performance, driven by sustained sales growth and favorable market conditions. Investors may now watch closely as the company strives to meet these heightened expectations in the coming year.
In other recent news, Chipotle Mexican Grill has been in the spotlight with several key developments. RBC Capital Markets adjusted its outlook on Chipotle, reducing the price target from $75.00 to $70.00 while maintaining an Outperform rating, citing challenges affecting the company’s 2025 financial guidance. The fourth-quarter report revealed weaker-than-expected same-store sales growth, with projections of low to mid-single-digit increases, contrasting with a market consensus of 5.4%. Despite these challenges, RBC Capital remains optimistic about potential improvements in the second half of 2025.
Morgan Stanley (NYSE:MS) upgraded Chipotle’s stock rating to Overweight, raising the price target to $70.00 from $65.00, highlighting the company’s strategies and technological advancements as key factors for future success. UBS also maintained a Buy rating with a $70.00 price target, expressing confidence in Chipotle’s growth potential despite mixed fourth-quarter results and cautious guidance for 2025. The firm anticipates strong margin expansion in the latter half of the year.
Additionally, Chipotle announced plans to hire 20,000 employees for its busiest period, "Burrito Season," using AI to streamline the hiring process. This initiative aligns with the company’s long-term goal of expanding to 7,000 restaurants in North America. The recent developments underscore Chipotle’s focus on menu innovation, digital sales, and operational growth, which remain central to its strategy in the competitive fast-casual dining market.
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