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
-
Stock Market Today: Another Quarter, More Mixed Price Action"Up and to the right" remains the general trend despite persistent uncertainty around critical policy issues.
-
Over 100k Medicare Accounts Breached in Latest Hack: Was Yours One?Letters are going out to 103,000 Medicare beneficiaries who may have been impacted. Here's how to protect your identity and benefits.
-
Stock Market Today: Another Quarter, More Mixed Price Action
"Up and to the right" remains the general trend despite persistent uncertainty around critical policy issues.
-
This 401(k) Withdrawal Snafu Could Knock Your Portfolio off CourseFew financial advisers have heard of this 401(k) withdrawal issue. Here's how to safeguard your portfolio.
-
Why Homeowners Should Beware of Tangled TitlesIf you're planning to pass down property to your heirs, a 'tangled title' can complicate things. The good news is it can be avoided. Here's how.
-
A Cautionary Tale: Why Older Adults Should Think Twice About Being LandlordsBecoming a landlord late in life can be a risky venture because of potential health issues, cognitive challenges and susceptibility to financial exploitation.
-
Home Equity Evolution: A Fresh Approach to Funding Life's Biggest NeedsHomeowners leverage their home equity through various strategies, such as HELOCs or reverse mortgages. A newer option: Shared equity models. How do those work, and what are the pros and cons?
-
AI vs the Stock Market: How Did Alphabet, Nike and Industrial Stocks Perform in June?AI is a new tool to help investors analyze data, but can it beat the stock market? Here's how a chatbot's stock picks fared in June.
-
Stock Market Today: A Historic Quarter Closes on High Notes"All's well that ends well" is one way to describe the second quarter of 2025, at least from a pure price-action perspective.
-
Keep Tax Collectors at Bay with Muni Bond FundsMunicipal bonds can be good insurance against inflation — and interest is tax-free. But as with all investments, understanding risk is key.
