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."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free 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
-
Dow Adds 646 Points, Hits New Highs: Stock Market TodayIt was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
-
5 Types of Gifts the IRS Won’t Tax: Even If They’re BigGift Tax Several categories of gifts don’t count toward annual gift tax limits. Here's what you need to know.
-
The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax DeductionTax Deductions We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year.
-
Dow Adds 646 Points, Hits New Highs: Stock Market Today
It was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
-
I'm a Tax Attorney: These Are the Year-End Tax Moves You Can't Afford to MissDon't miss out on this prime time to maximize contributions to your retirement accounts, do Roth conversions and capture investment gains.
-
I'm an Investment Adviser: This Is the Tax Diversification Strategy You Need for Your Retirement IncomeSpreading savings across three "tax buckets" — pretax, Roth and taxable — can help give retirees the flexibility to control when and how much taxes they pay.
-
Dow Rises 497 Points on December Rate Cut: Stock Market TodayThe basic questions for market participants and policymakers remain the same after a widely expected Fed rate cut.
-
Could an Annuity Be Your Retirement Safety Net? 4 Key ConsiderationsMore people are considering annuities to achieve tax-deferred growth and guaranteed income, but deciding if they are right for you depends on these key factors.
-
I'm a Financial Pro: Older Taxpayers Really Won't Want to Miss Out on This Hefty (Temporary) Tax BreakIf you're age 65 or older, you can claim a "bonus" tax deduction of up to $6,000 through 2028 that can be stacked on top of other deductions.
-
JPMorgan's Drop Drags on the Dow: Stock Market TodaySmall-cap stocks outperformed Tuesday on expectations that the Fed will cut interest rates on Wednesday.
-
Meet the World's Unluckiest — Not to Mention Entitled — Porch PirateThis teen swiped a booby-trapped package that showered him with glitter, and then he hurt his wrist while fleeing. This is why no lawyer will represent him.
