Chipotle Mexican Grill (CMG) stock jumped more than 5% in Wednesday's extended session after the burrito chain beat top- and bottom-line expectations in its second-quarter earnings report. However, shares quickly fell into the negative territory at the start of Thursday's session.
In the three months ended June 30, Chipotle said revenue increased 18% year-over-year to $3 billion, driven by new restaurant openings, a nearly 9% jump in restaurant traffic, and an 11% rise in comparable-restaurant sales. Its earnings per share (EPS) were up 36% from the year-ago period to 34 cents.
"The second quarter was outstanding as successful brand marketing, including the return of Chicken Al Pastor, drove strong demand to our restaurants," Chipotle CEO Brian Niccol said in a statement. "Our focus and training around throughput paid off as we were able to meet the stronger demand trends with terrific service and speed driving over 8% transaction growth in the quarter."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results exceeded analysts' expectations. Wall Street was anticipating revenue of $2.9 billion and earnings of 32 cents per share, according to CNBC.
As a result of its performance in the first half of the year, Chipotle reiterated its full-year outlook. It continues to anticipate comparable-restaurant sales growth in the mid- to high-single digits and expects to open between 285 and 315 new restaurants.
Is Chipotle stock a buy, sell or hold?
Chipotle stock had a strong start to 2024 and was up nearly 50% for the year to date through June 18. However, shares have been in a slump since Chipotle underwent a 50-to-1 stock split.
Still, analysts remain bullish on the consumer discretionary stock. According to S&P Global Market Intelligence, the average analyst target price for CMG stock is $63.71, representing an upside of more than 25% from current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Stifel is one of the more bullish outfits on CMG stock with a Buy rating and $70 price target.
"We believe the brand can continue to drive sales momentum utilizing new menu news, digital engagement and ongoing operational improvements," Stifel analyst Chris O'Cull said in a note following Chipotle's earnings release.
The analyst adds that Chipotle "has a considerable runway for new unit development" thanks to its Chipotlane drive-thru format that's "anticipated to reach a more meaningful percentage of the total footprint over the next few years, which should drive healthy margin expansion."
Stifel's $70 price target represents sits nearly 40% above where CMG stock is currently trading.
Related Content
-
Heirs Inheriting Crypto? Don't Make It a Headache for ThemIf you have cryptocurrency in your estate, you'll need meticulous plans and clear instructions to ensure beneficiaries don't lose out after you're gone.
-
DIY Retirement Planning: A Smart Move or a Risky Endeavor?You can cut the cost of retirement planning by doing it yourself. But for something this important, it might be wiser to call in the professionals.
-
Galentine's Day: A Time to Promote Financial Literacy Among FriendsHere are three things women can do to help their friends gain financial knowledge and confidence.
-
Stock Market Today: Markets Turn Lower on Nasty Inflation SurpriseEquities sold off after a hot reading on consumer price inflation pushed back rate cuts to autumn or year-end.
-
CPI Report Puts the Kibosh on Rate Cuts: What the Experts Are Saying About InflationCPI Consumer price inflation reared its ugly head to start the year, dashing hopes for the Fed to lower borrowing costs anytime soon.
-
These Two Issues Are Critical to Efficient Retirement PlanningYou're saving hard for retirement, but if you're not thinking ahead about taxes and the cost of health care, your savings — and your legacy — could be at risk.
-
How to Use Good Debt (While Identifying and Avoiding Bad Debt)Not all debt is bad, but knowing the difference between good debt and bad debt and how to use them can help you get ahead financially and stay ahead.
-
Stock Market Today: Markets Reflect Elevated UncertaintyInvestors and traders as well as CEOs and central bankers continue to adjust to a new administration in Washington, D.C.
