How Analysts View Chipotle After Earnings

Chipotle Mexican Grill Inc. (NYSE: CMG) reported its first-quarter financial results after the markets closed on Tuesday. Unfortunately for this quarter, results came out as well as expected and the stock took a huge hit. Analysts saw this coming, and a few issued some calls after the report came out as well.

The burrito giant said it had a net loss of $0.88 per share on $834.5 million in revenue. That compares to consensus estimates from Thomson Reuters that called for a net loss of $0.95 per share and revenue of $880.21 million. In the same period of last year, Chipotle posted earnings per share (EPS) of $3.88 and $1.09 billion in revenue.

Comparable restaurant sales decreased 29.7%, while comparable restaurant transactions decreased 21.1%.

The company opened 58 new restaurants during the quarter, bringing the total restaurant count to 2,066.
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In terms of the outlook for 2016, Chipotle did not give its normal guidance for revenue or EPS, but this is for good reason, as management probably doesn’t want investors to overreact. The company did note that it plans to open between 220 and 235 stores for the year. Consensus estimates for the full year call for $6.12 in EPS on $4.38 billion in revenue.

Steve Ells, founder, chairman and co-CEO of Chipotle, commented:

As our sales are on a gradual path to recovery, we remain focused on our mission of changing the way people think about and eat fast food. The best approach to re-building our business is to proudly serve safe and delicious food in our high-quality restaurants every single day, which is exactly what we will continue to do.

A few analysts weighed in on Chipotle after the earnings were reported:

• BTIG downgraded to a Neutral rating from Buy.
• Cowen has a Market Perform rating with a $400 price target.
• JPMorgan has an Overweight rating with a $510 price target.
• UBS has a Neutral rating with a $450 price target.
• Barclays has an Equal Weight rating with a $430 price target.
• Deutsche Bank has a Sell rating with a $360 price target.
• RBC has an Outperform rating with a $485 price target.

Shares of Chipotle were trading down 5.4% at $421.81 Wednesday afternoon, with a consensus analyst price target of $478.67 and a 52-week trading range of $399.14 to $758.61.