By Dhirendra Tripathi
Investing.com – Chipotle (NYSE:CMG) shares rose 2.5% in Tuesday’s trade after a back-channel check of the chain’s menu by Truist Securities revealed around a 4% system-wide price hike on its steak and barbacoa offerings.
"We estimate a 25-30% mix of beef in CMG's average check, which implies a ~100bps total menu price increase," the brokerage’s analyst Jake Bartlett said in a note.
According to Bartlett, the reason behind the price hike could be the company trying to offset the pressure on margins that higher steak sales during the pandemic would have brought.
He said this could this could drive significant upside to estimates.
It’s been a good year for the maker of quesadillas and burritos, reflecting in its share price reaching a 52-week high of $1564.91 in February.
The company has also invested in self-driving startup Nuro in its efforts to transform its digital business. The Softbank-backed Nuro is a market leader in autonomous delivery and uses robotics for safe delivery of everyday consumer goods.