NEW YORK (TheStreet) --Shares of Chipotle Mexican Grill (CMG - Get Report) are up 0.56% to $522.50 in pre-market trading on Monday following a ratings upgrade to "overweight" from "equal weight" at JP Morgan (JPM - Get Report).
The upgraded is due to a strong 2014 first quarter and the company's belief that "now is an opportunity to take advantage of price weakness in a stock that still has industry-leading fundamentals."
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 some important positives, 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, good cash flow from operations, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.8%. 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 61.44% 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 significantly exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. 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. The firm also exceeded the industry average cash flow growth rate of -31.16%.
- You can view the full analysis from the report here: CMG Ratings Report