Yesterday, investors were shocked to find out that CEO Brian Niccol is leaving Mexican restaurant chain Chipotle (CMG) to run coffee shop giant Starbucks (SBUX). Although CMG stock tanked after the announcement, Wall Street analysts aren’t too worried about Chipotle’s future. They point out that the company still has a strong team in place, with Scott Boatwright stepping in as interim CEO and former CFO Jack Hartung returning to oversee strategy, finance, and supply chain.
4.6-star Wedbush analyst Nick Setyan is feeling good about Chipotle’s prospects and bumped the stock up to Outperform. He’s confident that the company will keep thriving under its current leadership thanks to solid market positioning and growth opportunities. This optimism led to a 7% increase in the target price to $58 per share.
Analysts at UBS and Wells Fargo are also sticking with a positive outlook due to Chipotle’s strong traffic numbers—July saw a 12.5% increase—along with ongoing growth momentum. They think the market overreacted to Niccol’s departure, especially when considering Chipotle’s solid execution of its strategic plans.
Meanwhile, Evercore ISI became a bit more cautious and lowered its target price slightly to $59 per share from $65. Nevertheless, the firm kept its Buy rating in place, as it still believes Chipotle’s focus on AI-driven marketing and smart pricing will keep the company moving forward.
Is CMG a Buy or Sell?
Overall, analysts have a Moderate Buy consensus rating on CMG stock based on 16 Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 39% rally in its share price over the past year, the average CMG price target of $64.08 per share implies 24.43% upside potential.
