What Analysts Are Recommending for Chipotle

Is There More Upside to Chipotle’s Stock Price? (Continued from Prior Part) ## Analysts’ recommendations Of the 33 analysts that cover Chipotle Mexican Grill (CMG), 39.4% have given the stock “buy” ratings, 45.5% have given it “holds,” and 15.2% have given it “sells.” On average, analysts have set a price target of $470.46 on the stock, which represents a potential fall of 5.4% from its current price of $497.37. As we discussed in the previous article, BTIG, which has a “buy” rating on Chipotle, has identified Chipotle as one of its top picks for 2019. On January 8, KeyBanc raised its 12-month price target for Chipotle from $500 to $525. Barclays raised its price target from $400 to $450 on December 19. On October 26, Wedbush increased its price target from $380 to $400, Stifel cut its price target from $450 to $440, and SunTrust Robinson cut its price target from $510 to $500. ## Peer comparison Among the 12 analysts covering Shake Shack (SHAK), 33.3% have given it “buys,” 50.0% have given it “holds,” and 16.7% have given it “sells.” Its average price target of $53.09 implies a potential upside of 8.3% from its current price of $49.04. Among the 31 analysts covering McDonald’s (MCD), 78.1% have given it “buys,” and 21.9% have given it “holds.” Its average price target of $195.50 implies a potential upside of 8.3% from its current price of $180.60. ## Valuation multiple As of January 8, Chipotle is trading at a forward PE multiple of 41.6x compared to 32.5x on December 24. The increase in Chipotle’s stock price has increased its valuation multiple. As of the same day, its peers Shake Shack and McDonald’s have forward PE multiples of 67.4x and 22.0x, respectively. Chipotle is currently trading at 58.3 times analysts’ 2018 EPS expectations and 41.6 times analysts’ 2019 EPS expectations. Its EPS are expected to rise 29.2% in 2018 and 40.3% in 2019. Next, we’ll look at the factors that could drive Chipotle’s EPS in 2019. Continue to Next Part Browse this series on Market Realist: * Part 1 - Is There More Upside to Chipotle’s Stock Price? * Part 3 - Why Analysts Expect Chipotle’s EPS Growth to Increase in 2019