Analysts at Evercore ISI have reduced their price target for Chipotle Mexican Grill (NYSE:CMG) from $53.00 to $45.00, according to a report released on Thursday. Despite the downgrade, Evercore ISI maintains an “outperform” rating for the restaurant operator’s stock, which suggests a potential upside of 42.08% based on the stock’s previous closing price.
The adjustments to Chipotle’s stock price expectations come amid a flurry of recent analyst activity. On July 14, 2023, Melius initiated coverage of Chipotle, assigning a “hold” rating and a projected target price of $60.00. Following closely, on July 25, Guggenheim lowered their target price from $47.00 to $46.00 while maintaining a “neutral” rating.
In September, Rothschild & Co Redburn upgraded Chipotle’s rating from “neutral” to “buy” with a target price of $55.00, indicating a more optimistic outlook. A few weeks later, on October 8, Weiss Ratings reiterated a “hold (c)” rating for the stock. Most recently, Mizuho set a target price of $34.00 for Chipotle Mexican Grill.
Investor sentiment is reflected in the ratings from various analysts. Two have assigned a Strong Buy rating, while twenty-two analysts favor a Buy rating, and eleven recommend holding the stock. According to data from MarketBeat, Chipotle currently holds a consensus rating of “Moderate Buy” with a price target averaging $49.81.
Chipotle’s Recent Financial Performance
On October 29, 2023, Chipotle Mexican Grill released its latest earnings results, reporting earnings per share (EPS) of $0.29 for the quarter, aligning with analysts’ expectations. The company demonstrated a robust 44.32% return on equity and achieved a net margin of 13.04%.
Revenue for the quarter reached $3 billion, slightly short of the $3.06 billion expected by analysts. This figure represents a 7.5% increase compared to the same quarter last year, when the company reported an EPS of $0.27. Looking ahead, analysts predict that Chipotle Mexican Grill will post an EPS of 1.29 for the current fiscal year.
Institutional Investor Activity
Recent trends in institutional ownership indicate that hedge funds and other large investors are actively adjusting their positions in Chipotle. For instance, Operose Advisors LLC acquired a new stake in the company valued at approximately $25,000 during the second quarter. Similarly, Signature Resources Capital Management LLC and Lavaca Capital LLC each made new investments worth around $28,000.
In the first quarter, Cloud Capital Management LLC also made a new acquisition valued at about $25,000. Notably, Activest Wealth Management increased its stake in Chipotle by 109.3% during the second quarter, now owning 517 shares worth approximately $29,000 after purchasing an additional 270 shares.
As it stands, institutional investors hold a significant 91.30% of Chipotle’s stock, reflecting strong confidence in the company’s business model and growth potential.
Chipotle Mexican Grill operates numerous locations across the United States, Canada, France, Germany, and the United Kingdom, offering a diverse menu that includes burritos, burrito bowls, quesadillas, tacos, and salads. The company also provides delivery services through its app and website, further expanding its reach to customers.
