Photo credit: Chis Potter, Flickr

Chipotle Mexican Grill, Inc. CMG will close 2019 the same way it started the year as a "top pick" stock at Piper Jaffray.

The Analyst

Nicole Miller Regan maintains an Overweight rating on Chipotle's stock with a $904 price target.

The Thesis

The bullish case for making Chipotle a preferred investment idea in 2020 is based on three catalysts, Miller Regan wrote in a note.

First, the restaurant chain is poised to deliver near-term comp beats after recent first-hand checks point to a potential top-line growth in the mid-single-digit range in the fourth quarter. The company could report same-store sales growth as high as 10%, which is above the current consensus estimate of 9.3%.

Second, Chipotle restaurant offers superior unit-level economics compared to its peers. For example, when the restaurant hit trough levels in 2016 its average unit volume (AUV) was still in-line with other fast-casual rivals. The company's "middle-of-the-road" $11 average transaction coupled with expectations for AUV growth in the coming year, AUV and unit-level return metrics could become "even more impressive."

Finally, the "contrarian" bullish call for 2020 is based on expectations for earnings per share to rise to $25 to $30 in 2021. The undiscounted value at current levels implies a 75% upside potential based on current multiples.

Price Action

Shares of Chipotle traded around $834.50 Monday morning.