BOSTON ( TheStreet) -- Goldman Sachs analysts are bullish on burritos and yoga apparel, adding Chipotle Mexican Grill (CMG - Get Report) and Lululemon Athletica (LULU - Get Report) to the firm's conviction-buy list.
Goldman analyst Michael Kelter says restaurant stocks will outperform in 2012, with quick-service restaurants (QSR) preferred over casual dining spots. He argues that lower food costs will likely lead to wider margins by the second half of the year. Kelter also argues that high-multiple growth stocks will outperform value stocks in the QSR group.
For that reason, Kelter added Chipotle Mexican Grill, a high flier with a forward price-to-earnings ratio of nearly 40, to Goldman's prestigious conviction buy list. Kelter says he expects earnings to grow by 35% to 40% this year, noting that his estimate for earnings of $9.39 a share is well ahead of the consensus estimate of $8.63 a share."We expect upside to both
>To contact the writer of this article, click here: Robert Holmes. >To follow Robert Holmes on Twitter, go to http://twitter.com/RobTheStreet. >To submit a news tip, send an email to: firstname.lastname@example.org.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts