Stephens cuts Chipotle stock price target to $49 from $54

On Thursday, Stephens analysts adjusted their financial outlook for Chipotle Mexican Grill (NYSE:CMG), reducing the price target from $54.00 to $49.00, while keeping an Equal Weight rating on the stock. The revision follows Chipotle’s release of their first-quarter financial results for 2025, which presented a slight shortfall in same-store sales and unit growth, yet surpassed expectations with stronger restaurant-level margins and adjusted earnings per share (EPS). The company, currently valued at $66.09 billion, maintains strong financial health with a gross profit margin of 40.5% and revenue growth of 14.6% over the last twelve months.

Chipotle also revised its full-year 2025 same-store sales forecast, anticipating a downturn in the second quarter, with a rebound expected in the latter half of the year. The analysts observed that while Chipotle is poised for better performance in the second half due to easier year-over-year comparisons and increased marketing efforts, the industry’s high performers are typically driven by exceptional traffic growth. The anticipated negative comparable sales for the first half of the year were cited as a challenge to projecting near-term gains. According to InvestingPro data, 18 analysts have recently revised their earnings downward for the upcoming period, reflecting growing caution about near-term performance.

The new price target of $49 implies an enterprise value to EBITDA (EV/EBITDA) multiple of roughly 25 times Stephens’ next twelve months (NTM) EBITDA estimate for Chipotle, which stands at $2,591 million. This valuation is in line with Chipotle’s 10-year average trading multiple. Current InvestingPro data shows the stock trading at an EV/EBITDA multiple of 29.9x and a P/E ratio of 43.29x, suggesting premium valuations relative to historical averages. Discover 12 more exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.

The analysts’ commentary highlighted the competitive landscape of the restaurant industry, suggesting that Chipotle’s performance in the first half of 2025 might hinder its ability to capitalize on potential short-term opportunities. Despite the lowered expectations for the near future, Stephens analysts maintain their neutral stance on the stock, reflecting a cautious optimism for Chipotle’s recovery in the second half of the year. The company maintains strong fundamentals with a healthy current ratio of 1.52 and operates with a moderate level of debt, according to InvestingPro analysis.

In other recent news, Chipotle Mexican Grill’s first-quarter earnings have been a focal point for analysts, resulting in multiple adjustments to the company’s stock price targets. Chipotle reported an adjusted earnings per share of $0.29, aligning closely with estimates, but faced a decline in customer traffic and a 0.4% decrease in same-store sales. Revenue for the quarter was $2.88 billion, falling short of expectations. BTIG, Raymond (NSE:RYMD) James, Evercore ISI, Goldman Sachs, and KeyBanc have all lowered their price targets, citing the weaker-than-expected sales performance and challenging market conditions. Despite these concerns, most firms maintained positive ratings on Chipotle’s stock, highlighting potential growth drivers such as increased marketing efforts, new menu items, and operational improvements. Analysts also noted Chipotle’s strong brand presence and strategic initiatives as factors that could support a rebound in the latter half of the year. The company is expected to introduce limited-time offers and ramp up advertising to enhance brand awareness. Additionally, Chipotle is exploring the expansion of its catering services, which could contribute to long-term growth.

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