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Is There More Upside to Chipotle’s Stock Price?

Is There More Upside to Chipotle’s Stock Price?

Is There More Upside to Chipotle’s Stock Price? ## Stock performance The weakness in the broader equity market due to the increase in the interest rate by the Federal Reserve and concerns over the government shutdown led Chipotle Mexican Grill (CMG) stock to fall to $385.84 on December 24. However, since then, the company’s stock has been on the upswing. On January 8, Chipotle was trading at $497.37, a rise of 28.9% from its December 24 closing price. The company is trading 100.9% higher than its 52-week low of $247.52 and 6.3% lower than its 52-week high of $530.68. ## Chipotle’s stock price drivers As reported by Yahoo Finance, Peter Saleh and Ben Parente of BTIG have identified Chipotle as one of their top picks for 2019. In a research note, BTIG wrote, “We believe Chipotle has multiple levers at its disposal in 2019 to drive both top and bottom line outperformance, including menu innovation, digital sales growth, loyalty, menu pricing and improving new unit economics.” Also, on January 8, KeyBanc raised its 12-month price target for Chipotle from $500 to $525. On January 2, Chipotle launched a line of new Lifestyle Bowls, which include the Keto Salad Bowl, the Paleo Salad Bowl, the Whole30 Salad Bowl, and the Double Protein Bowl. It’s launched these healthier options to support customers’ New Year’s resolutions. All these factors have contributed to the rise in Chipotle’s stock price. ## Stock performance in 2018 In recent years, Chipotle stock has been negatively affected by a series of food safety issues. The company was first hit by an E. coli outbreak in December 2015. The food safety issues caused Chipotle stock to fall from its all-time high of $758.61 on August 5, 2015. However, investors’ optimism about the appointment of Brian Niccol as the company’s CEO in March and the company’s strong performance in the first three quarters of 2018 helped the stock rise 49.4% in 2018. Year-to-date, the company’s stock has risen 15.2%. Chipotle’s peers Shake Shack (SHAK) and McDonald’s (MCD) returned 5.1% and 3.2% in 2018, respectively. Next, we’ll look at analysts’ recommendations on CMG. Continue to Next Part Browse this series on Market Realist: * Part 2 - What Analysts Are Recommending for Chipotle * Part 3 - Why Analysts Expect Chipotle’s EPS Growth to Increase in 2019