Andrew Strelzick, an analyst at BMO Capital, hiked his rating on the fast-casual Mexican chain to market perform from underperform.
The BMO Capital analyst also raised his price target to $780 a share. That's up from $680 previously and represents a roughly $12 a share premium over Chipotle's current trading price.
BMO's Strelzick cited Chipotle's just reported better-than-expected quarterly sales numbers, actions taken by the Mexican fast-casual chain to position itself for a strong "re-open," and a more favorable price point for investors.
Chipotle on Wednesday reported earnings of $3.08 a share, blowing past the $2.50 estimate of analysts surveyed by Zacks Investment Research.
While Chipotle's earnings were down 9.4% from the first quarter of 2019, the decline likely could have been steeper given the severe impact that Covid-19 has had on the restaurant sector, which has forced the fast-casual Mexican chain to temporarily shutter 100 locations.
Chipotle's stock price fell 1.74% on Thursday to $866.94, with shares having bounced back after hitting a low of $455.21 on March 18.
The BMO Capital analyst also boosted his ratings on Olive Garden owner Darden Restaurants (DRI) - Get Darden Restaurants Inc. Report, Brinker International (EAT) - Get Brinker International Inc. Report, Chuy's (CHUY) - Get Chuy's Holdings Inc. Report, and Texas Roadhouse (TXRH) - Get Texas Roadhouse Inc. Report.
BMO's Strelzick raised Darden, Brinker, Chuy's and Texas Roadhouse each to market perform. While the analyst raised his price target on Darden to $72 a share, he cut his price targets on the other three chains.