Wedbush analyst Nick Setyan reiterated an Outperform rating on the shares of Chipotle Mexican Grill Inc (NASDAQ: CMG) and raised the price target from $2,200 to $2,300.
The analyst expects CMG's Q2 same-store-sales growth to be in-line or slightly above the 7.4% consensus.
The analyst said a sales lift from the chicken al pastor LTO and more seasoned staff are the factors that aid in the SSS growth.
The analyst continues to view menu innovation, loyalty/digital, throughput, and marketing spend growth as ongoing drivers of SSS growth.
Also, with no plans to increase prices for the remainder of this year and a 2H LTO that's unlikely to underperform last year's Garlic Guajillo Steak, the analyst views the current Q3 consensus transaction growth estimate of 3.5% and the Q4 estimate of 4.2% as conservative.
With stable labor costs and a stable-to-down delivery mix outlook, the analyst expects comparable upside to flow through.
The analyst's 12-month PT represents a 41.8x multiple, net of cash, on 2024 EPS estimate, a 10% premium to CMG's pre-COVID 10-year median forward P/E of 37.8x.
The analyst believes CMG is poised to see accelerated market share gains in a post-COVID environment, resulting in sustained growth above pre-COVID levels.
Price Action: CMG shares are trading higher by 1.53% at $2,081.26 on the last check Wednesday.