Chipotle Stock Falls After Q4 Print: Should Investors Buy The Dip?

Chipotle Stock Falls After Q4 Print: Should Investors Buy The Dip?

Photo courtesy of Chipotle. 

Casual restaurant chain Chipotle Mexican Grill, Inc. CMG reported Tuesday with fourth-quarter results that prompted a 3% selloff in shares by Wednesday morning.

Here's how the Street reacted to the print.

The Chipotle Mexican Grill Analysts

Raymond James analyst Brian Vaccaro maintains a Market Perform rating on Chipotle's stock with no price target.

KeyBanc Capital Markets analyst Eric Gonzalez maintains an Overweight rating on Chipotle's stock with an unchanged $1,625 price target.

Morgan Stanley analyst John Glass maintains an Equal-weight rating on Chipotle's stock with a price target lifted from $1,352 to $1,465.

Wedbush analyst Nick Setyan maintains an Outperform rating on Chipotle's stock with a price target lifted from $1,600 to $1,800.

Cowen analyst Andrew Charles maintains an Outperform rating on Chipotle's stock with a price target lifted from $1,640 to $1,900.

Stephens analyst James Rutherford maintains an Equal-Weight rating on Chipotle's stock with a price target lifted from $1,265 to $1,450.

Raymond James: Strong Chipotle Sales Offset By Margins

Chipotle reported an 11.6% year-over-year increase in revenue to $1.61 billion as comps rose 5.7% versus estimates of $1.57 billion and 4%, respectively, Vaccaro said in a note.

Digital sales as a percentage of total sales were steady from the prior quarter at around 49%, half of which was delivery, the analyst said. 

The company's strong sales results were offset by store margins coming in at 19.5% versus management's targeted algorithm of 22%, he said.

Margins were impacted by higher delivery fees and COVID-19-related costs, Vaccaro said. 

Earnings per share of $3.48 beat the research firm's estimate of $3.39 but were shy of the Street's consensus estimate of $3.73, according to RayJay. 

KeyBanc On Chipotle's Digital Growth

Digital sales were higher by 177% year-over-year and online transactions are proving to be sticky, Gonzalez said in a note.

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