Story updated at 10 a.m. to reflect market activity.
Shares of Chipotle gained 0.8% to $600.95 in morning trading Thursday.
The analyst firm raised its estimates for the restaurant operator along with the new price target. Sterne Agee said new concepts should help Chipotle drive growth. The firm maintains its "buy" rating for the company.
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TheStreet Ratings team rates CHIPOTLE MEXICAN GRILL INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHIPOTLE MEXICAN GRILL INC (CMG) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 20.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 29.74% and other important driving factors, this stock has surged by 79.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- CHIPOTLE MEXICAN GRILL INC has improved earnings per share by 29.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CHIPOTLE MEXICAN GRILL INC increased its bottom line by earning $10.46 versus $8.75 in the prior year. This year, the market expects an improvement in earnings ($13.00 versus $10.46).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Hotels, Restaurants & Leisure industry average. The net income increased by 29.8% when compared to the same quarter one year prior, rising from $61.35 million to $79.62 million.
- Net operating cash flow has increased to $140.07 million or 11.13% when compared to the same quarter last year. In addition, CHIPOTLE MEXICAN GRILL INC has also vastly surpassed the industry average cash flow growth rate of -51.95%.
- You can view the full analysis from the report here: CMG Ratings Report