Why are shares of Chipotle up 10%?

Posted: 9 February 2022 5:04 pm
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The restaurant’s stock started climbing after reporting better-than-expected earnings. Analysts say it has more room to run.

Shares of fast-casual restaurant Chipotle Mexican Grill (CMG), often referred to simply as Chipotle, climbed 10% this week after a strong earnings report.
Shares jumped more than $130 after market hours Tuesday, returning to a price not seen for almost a month, then tacked on more Wednesday to reach a trading session high of $1,616 and a 10% two-day gain.

Why Chiptole’s stock is rising

Chipotle reported quarterly earnings Tuesday that topped analyst expectations.
The company saw fourth-quarter 2021 earnings growth of 60.3% year over year to $5.58 per share, beating analyst estimates of $5.26. Revenue was in line with analyst expectations at $1.96 billion for the quarter, up 22% from the same quarter last year.
Food, beverage and packaging costs in the quarter rose 24.42% compared to last year, driven by higher beef, freight and avocado prices. Menu price increases helped offset inflation but food, beverage and packaging costs still amounted to 31.6% of Chipotle’s total revenue for the quarter.
Chipotle opened 78 new restaurants in the fourth quarter and is now aiming to open at least 7,000 restaurants in North America over time, up from the company’s prior goal of 6,000. By 2022’s end, Chipotle expects to open between 235 to 250 new restaurants, assuming permitting and construction delays due to the pandemic don’t worsen.

Thinking of buying Chipotle stock?

Wall Street consensus estimates Chipotle stock will hit $1966.35 per share over the next 12 months. Even after this pop, that’s a 23% premium.
Of the 30 analysts covering the stock, 21 give it a Strong Buy or Outperform, versus nine Holds and no Sells of any kind. That includes Morgan Stanley’s John Glass, who upgraded Chipotle’s stock last month from Equal Weight to Overweight.
At the time of publication, Matt Miczulski did not own shares of any equity mentioned in this story.

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