JPMorgan analyst John Ivankoe raised his price target for Chipotle Mexican Grill to $320 but keeps a Neutral rating on the name. Incoming interest on Chipotle has "taken a marked turn upwards" since the announcement that former Taco Bell CEO Brian Niccol would be taking over, Ivankoe tells investors in a research note. He believes, however, that investors shouldn't chase the shares following the recent rally. Competition and labor costs may make a substantive turnaround more difficult, the analyst contends. Ivankoe believes Chipotle shares are fairly priced.
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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%.