JPMorgan analyst John Ivankoe tells investors to take profits in Chipotle Mexican Grill on today's post-earnings rally. The stock is more than fully valued based on the recently increased out-year estimates, Ivankoe tells investors in a research note following Chipotle's Q1 results. He raised his price target for the shares to $420 from $365 and keeps a Neutral rating on the name.
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For 2024, management is anticipating the following: Full year comparable restaurant sales growth in the mid to high-single digit range; 285 to 315 new restaurant openings with over 80% having a Chipotlane. An estimated underlying effective full year tax rate between 25% and 27% before discrete items.
Reports Q1 revenue $2.7B, consensus $2.67B. Comparable restaurant sales increased 7.0%. "We had another outstanding quarter driven by our improvement in throughput and successful marketing initiatives, including Braised Beef Barbacoa and Chicken Al Pastor, which drove strong sales and transactions. The results we are seeing from our focus on developing exceptional people, preparing delicious food and fast throughput gives me confidence that we can achieve our long-term target of more than doubling our business in North America and expanding internationally," said Brian Niccol, Chairman and CEO, Chipotle.
Pre-earnings options volume in Chipotle is 1.5x normal with puts leading calls 9:7. Implied volatility suggests the market is anticipating a move near 5.3%, or $154.14, after results are released. Median move over the past eight quarters is 7.0%.