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On Tuesday, Truist Securities adjusted the price target for Chipotle Mexican Grill (NYSE:CMG) shares, bringing it down to $64 from the previous $71, while keeping a Buy rating on the stock. According to InvestingPro data, the stock currently trades at a P/E ratio of 41.12, with 14 analysts recently revising their earnings expectations downward. The company maintains strong financial health with an overall score of "GREAT" based on InvestingPro’s comprehensive analysis. The adjustment follows the analysis of Truist Card data, which led to the projection of a flat same-store sales (SSS) estimate for the first quarter of 2025, falling short of the consensus expectation of a 1.9% increase.
The deceleration in sales trends for Chipotle was noted in April, with an approximate 400 basis points drop. This deceleration is attributed to challenging comparisons with the previous year, rather than a lackluster performance of the recently launched ’Chipotle Honey Chicken’ limited-time offering (LTO) on March 7 or consumer resistance to the company’s pricing post-COVID. Despite these challenges, InvestingPro data shows the company achieved impressive revenue growth of 14.61% in the last twelve months, with a healthy gross profit margin of 40.54%. The analyst believes that Chipotle still offers strong relative value, as indicated by the positive customer traffic recorded in 2024.
In addition to the price target revision, Truist Securities has also revised its earnings per share (EPS) estimate for the first quarter of 2025 to $0.26, a decrease from the earlier forecast of $0.29 and slightly below the consensus estimate of $0.27. The new estimates reflect the updated sales trend data and the expectation of improving trends as the company moves past the difficult year-over-year comparisons.
Chipotle’s stock price adjustment by Truist Securities comes with an optimistic outlook for the company’s future performance despite the recent sales trends. The firm’s maintained Buy rating suggests a continued positive long-term perspective on the stock’s potential. With the next earnings report scheduled for April 23, 2025, investors can access detailed analysis and 15 additional key insights through InvestingPro’s comprehensive research report, which provides in-depth coverage of CMG among 1,400+ top US stocks.
In other recent news, Chipotle Mexican Grill has been the focus of several analyst reports and strategic announcements. Guggenheim analysts have lowered their price target for Chipotle shares to $48, maintaining a neutral stance, citing soft traffic trends due to adverse weather and calendar shifts. They anticipate a potential revision in Chipotle’s same-store sales guidance to flat or low single-digit growth, with earnings per share projections for 2025 and 2026 falling below consensus. Meanwhile, UBS has adjusted its price target to $65 but continues to support a Buy rating, highlighting Chipotle’s favorable long-term prospects despite short-term sales challenges. KeyBanc Capital Markets also revised its price target to $60 while maintaining an Overweight rating, noting the company’s valuation nearing a historical low point.
Furthermore, Chipotle is set to expand into Mexico through a development agreement with Alsea (BMV:ALSEA), marking its first venture into the Mexican market by early 2026. This move is part of Chipotle’s broader international expansion strategy, which includes opening new locations in the U.S. and Canada. RBC Capital Markets has reduced its price target to $65 but retains an Outperform rating, reflecting a stable outlook despite a slight dip in customer enthusiasm for the limited-time chipotle honey chicken offering. These developments indicate a dynamic period for Chipotle, with analysts expressing varied perspectives on its near-term performance and long-term growth potential.
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