Chipotle Mexican Grill (CMG) shares were rising nearly 3% Monday after analysts at Goldman Sachs initiated coverage of the stock with a buy rating and added it to the firm's Conviction List.
The firm also gave the company a $1,000 price target, giving the fast food company a 28% upside from its closing price on Friday of $779.86. The stock jumped following the company's latest earnings beat, and Chipotle shares were trading at a new intraday high of $801.94 on Monday.
"While we expect investors to push back on shares up 80% (year to date) as good news being priced in - or worried they missed the rally - CMG shares have lagged the sector and the S&P 500 meaningfully since food safety issues in 2015," wrote Goldman analyst Katherine Fogertey.
Digital sales will be the growth driver for the company going forward, according to Fogertey, as the company's investments into driving digital sales start to pay off.
"By ﬂexing their digital muscle and migrating customers to this channel, the company is able to grow capacity in the stores well beyond prior 'peak' in 2014 as well as grow frequency and spend potential," Fogertey said.
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