Will stock prices for Chipotle Mexican Grill rise or fall according to Wall Street analysts' predictions?
Chipotle Mexican Grill's Stock Performance and Analyst Predictions for 2025
Chipotle Mexican Grill Inc. (CMG), a prominent quick-casual restaurant chain known for its fresh Mexican-style cuisine, currently holds a market capitalization of $68.7 billion. The company, headquartered in Newport Beach, California, operates hundreds of locations across the U.S. and internationally, with a focus on responsibly sourced ingredients and a streamlined menu.
Despite the company's strong points, CMG's shares have underperformed the broader market over the past 52 weeks, plunging 19.1% compared to the S&P 500 Index's 11.6% rise. This trend continued YTD, with CMG's shares losing 15.4% compared to SPX's marginal increase.
In Q1 2025, Chipotle reported a 6% revenue growth, reaching $2.9 billion. The company also observed a 7% increase in adjusted EPS to $0.29, surpassing analyst estimates. Investors were pleased with the company's 57 new restaurant openings, including international expansion and Chipotlanes, as well as a 7.5% increase in adjusted net income to $396.8 million, surpassing expectations.
However, comparable-restaurant sales declined by 0.4%, with transactions dropping 2.3%. This was marginally offset by a 1.9% increase in average check size. Operating margins contracted by 130 basis points to 26.2%, mainly due to rising food and labor costs, larger portion sizes, and a 50-basis-point margin hit from tariffs. Traffic (customer visits) is expected to turn positive only in the second half of 2025, with the full year projected to deliver low single-digit comparable sales growth.
For the current fiscal year, analysts anticipate an 8% year-over-year growth in CMG's adjusted EPS to $1.21. The company has a promising earnings surprise history, beating the consensus estimates in the last four quarters.
As of the latest analyst consensus, 19 "Strong Buy" ratings, three "Moderate Buys," and eight "Holds" indicate a "Moderate Buy" rating for CMG. This is slightly less bullish compared to three months ago, when 20 "Strong Buy" ratings were registered on the stock.
On April 14, RBC Capital cut Chipotle's price target to $65 but maintained an "Outperform" rating, downplaying a slight decline in Chipotle Honey Chicken's traffic impact from 75% in March to 68% in April. As of writing, CMG is trading below the mean price target of $58.77. The Street-high price target of $70 implies a potential upside of 37.3% from the current price levels.
Investors should weigh the near-term challenges against CMG's long-term growth prospects before deciding on exposure to the stock. The limited near-term upside, coupled with operational headwinds and an elevated valuation, suggests caution. However, multiple forecasts predict significant upside potential by the end of 2025 and beyond, with optimistic projections ranging from modest gains to strong double-digit returns.
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- Engaging in the finance sector, analysts have predicted an 8% year-over-year growth in Chipotle Mexican Grill's (CMG) adjusted EPS to $1.21 for the current fiscal year, offering potential investing opportunities for business individuals.
- In the realm of business, despite the challenges Chipotle Mexican Grill Inc. (CMG) currently faces, such as shrinking comparable-restaurant sales and increased costs, multiple analyst forecasts predict significant upside potential by the end of 2025 and beyond, suggesting that investors might find long-term finance opportunities in this quick-casual restaurant chain.
