This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

[video] Chipotle Soars: What Wall Street Says

Stocks in this article: CMGPNRASBUX

NEW YORK (TheStreet) - Shares of Chipotle Mexican Grill (CMG) were up surging 13.5% to $560.88 on Friday after another fantastic quarter.

The Denver-based burrito chain said late Thursday that fourth-quarter comparable restaurant sales were up 9.3% year-over-year, double the growth rate a year earlier and far exceeding the 6.7% rise anticipated by estimates provider Consensus Metrix.

Chipotle said fourth-quarter net income jumped 29.8% to $79.6 million, or $2.53 a share, in line with the consensus estimate. Revenue of $844.1 million beat expectations among analysts polled by Thomson Reuters by $17.8 million and were up 20.7% from the fourth quarter of 2012, driven by increased traffic in stores. 

Looking ahead, management expects 2014 comparable restaurant sales growth in the low to mid single-digit range, excluding menu price increases.

Earlier this week, Chipotle launched "Farmed and Dangerous," a satirical comedy series that will be on Hulu and Hulu Plus starting Feb. 17 that "explores the world of industrial agriculture in America."


WATCH: Jim Cramer says Chipotle is 'Remarkable'

This four-episode series is sure to be filled with suspense and plenty of entertainment, all while attempting to show Chipotle's view on sustainable agriculture and against genetically modified foods. Chipotle said last year that it was moving to a GMO-free menu, which could place pressure on food pricing and is one of the reasons it's been hinting at a menu raise.

TheStreet's Jim Cramer is a fan of Chipotle. "Lots of times people ask me how a stock can jump so much in one particular day. Usually I have to talk about gross margin inflection points or shrinking to grow or some sort of fancy explanation involving a cut in capital expenditures at the same time as an acceleration in revenue," Cramer wrote in an article, Chipotle's Simple Winning Ways. "Then Chipotle will come along and make it all so easy. It just sold a ton more burritos than you thought it could." 

Here's what others on Wall Street are saying about Chipotle today:

Lynne Collier, Sterne Agee (Buy; $603 PT)

"We continue to believe that CMG has the best business model created in the restaurant industry to date. Despite weather, same-store sales accelerated to 9.3% in 4Q and underlying trends remain similar in 1Q thus far. Overall, we believe the continued sales momentum is a testament to the strength of the Chipotle model. Assuming a price increase in late '14, we see margin expansion further driving earnings, and we continue to believe that the runway for unit growth remains vast."

"Menu Price Update: While a menu price increase is not certain, management indicated that with food costs at current levels, it is likely that the Company will increase prices in 3Q. We expect the Company to time the price increase along with the adoption of exclusively GMO-free ingredients, which should be in place by the end of FY14. We continue to believe a price increase would be in the range of 3-5% and that an increase in the 4% range could drive restaurant-level margins higher by approximately 250 bps (to record levels). We continue to believe that CMG has significant pricing power as we believe that the brand's menu pricing is below its peers."

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,133.25 +158.94 0.94%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,546.9470 -2.2790 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs