Services

What to Expect From Chipotle Earnings

Chris Lange

Published: October 25, 2016 11:50 am

Last Updated: January 13, 2020 1:57 am

Chipotle Mexican Grill Inc. (NYSE: CMG) is scheduled to report its third-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for $1.59 in earnings per share (EPS) on revenue of $1.09 billion. The same period of last year reportedly had EPS of $4.59 and $1.22 billion in revenue.

Even though the E. coli outbreak at Chipotle seems to be long gone, analysts are still cautious on the stock, especially after its most recent earnings report. The burrito chain missed estimates in the second quarter report. Although this fueled a couple of negative analysts’ opinions, investor sentiment was fairly positive.

Credit Suisse said that it believes that shares may continue to be range-bound until they lap the full crisis starting in November and December, which will provide more definitive evidence of the pace of recovery. The firm continues to believe sales recovery is more likely than not.

Chipotle’s recovery from food incident sales declines continues to be slower than expected, with the stock still down on the year. Same-store sales were especially weak (down 26% in the second quarter) in the Northeast and on the West Coast, where the highly publicized food incidents occurred.

A few analysts weighed in on Chipotle ahead of the earnings report:

• Buckingham Research has a Buy rating and a $547 price target.
• Wells Fargo reiterated an Outperform rating with a $450 price target.
• RBC Capital Markets reiterated an Outperform rating with a $465 price target.
• Raymond James reiterated an Underperform rating.
• Wedbush reiterated an Underperform rating with a $370 price target.
• Nomura has a Neutral rating with a $372 price target.
• Maxim Group reiterated a Sell rating with a $325 price target.
• Goldman Sachs has a Neutral rating with a $395 price target.

So far in 2016, Chipotle has vastly underperformed the broad markets, with the stock down about 14%. Over the past 52 weeks, the stock has fallen 37%.

Shares of Chipotle were trading at $415.12 on Tuesday, with a consensus analyst price target of $433.19 and a 52-week trading range of $384.77 to $662.98.