Chipotle’s Super Bowl Ad: Burritos + Sustainability

The Super Bowl television broadcast traditionally includes high-profile, creative ads from major American companies. Nearly half of Americans (47%) say they look forward to the ads and consider them an integral part of the Super Bowl experience, Refinitiv discovered in a collaboration with Maru/Blue Public Opinion, a panel, and data service insight firm.

This year, Chipotle will introduce its first Super Bowl commercial, titled “Can a Burrito Change the World?”. The ad focuses on making sustainable change to the way the food industry operates, tapping into consumers’ current focus on health and sustainability.

In a release, Chipotle said, “The company believes the global pandemic has shifted consumer behavior to lean towards a community-focused society, further igniting a passion inside of many for making purchasing decisions that drive difference in the world around them.” (Source: Investor Relations Chipotle, Jan 25, 2021)

However, shareholders might ask whether this fast-casual restaurant chain can realize a decent return on the estimated $5 million price for 30 seconds of airtime.

In an attempt to answer that question, we look at Chipotle’s revenue estimates for the first quarter ended March 31, 2021, the first quarter in which it is a Super Bowl advertiser. Here’s what we found: the needle is indeed expected to move in the right direction. [Exhibit 1]

Exhibit 1: Chipotle Sales Results/Estimates 2019 – 2021

Source: Refinitiv I/B/E/S

Extra points

Moreover, the StarMine SmartEstimate data shows investors can expect positive surprises from Chipotle in Q1 2021. The SmartEstimate is a weighted average of analyst estimates, with more weight given to more recent estimates and more accurate analysts. Our studies have shown that when the SmartEstimate differs from the consensus (I/B/E/S mean) by more than 2%, the company is likely to post subsequent earnings surprises directionally correct 70% of the time. This percentage difference is referred to as the Predicted Surprise (PS%). For Chipotle, the PS% is 5.39%.

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