A recent report by the Wall Street Journal highlighted that the U.S. restaurant industry is under pressure from inflationary concerns among consumers and rising costs, impacting sales and earnings growth. Nonetheless, Chipotle Mexican Grill (NYSE:CMG), a quick-service restaurant chain operator, stands out from its competitors due to its sustained business momentum. Its sticky customer base has helped the company deliver strong comparable sales and earnings growth.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
It’s worth noting that Chipotle’s comparable restaurant sales increased by 10.9%, 7.4%, 5%, and 8.4% in Q1, Q2, Q3, and Q4 of 2023, respectively. This growth is remarkable, considering Chipotle’s consistent menu price increases and macro headwinds. It indicates the loyalty of its customer base, which bodes well for the company’s future revenue and EPS growth.
Analysts Expect CMG’s Sales to Grow by 13%
Chipotle will release its Q1 financial results on Wednesday, April 24. Analysts expect CMG to deliver revenue of $2.67 billion in Q1, reflecting a year-over-year increase of about 13%. However, unusually cold weather in January could adversely impact its top line in Q1.
Meanwhile, analysts expect CMG to report earnings of $11.66 per share, up about 11% year-over-year.
Is Chipotle a Buy, Sell, or Hold?
Chipotle stock has gained about 59.7% in one year. This growth stems from its ability to grow comparable sales amid challenges. However, due to the notable increase in CMG stock, Wall Street is cautiously optimistic about its prospects ahead of the Q1 print.
Chipotle stock has a Moderate Buy consensus rating based on 19 Buys and nine Hold recommendations. The average CMG stock price target of $2,999.89 implies about 4.56% upside potential from current levels.
