NEW YORK (TheStreet) -- Chipotle Mexican Grill (CMG) shares may be worth $1,300 each by 2020 according to Janney's analyst Mark Kalinowski.
"If - if - Chipotle can reasonably keep up its unit-growth rate by decade's end, then the range of P/E multiples we apply to the 2020E EPS range of possibilities (from $37.50 to $52.50) is from 25x to 35x... with the middle portion of our assumptions getting us to a year-end 2020 stock price of $1,169 to $1,544," said Kalinowski. "The bottom line: the long-term earnings potential of this company remains enormous, and best-case, even at the stock's current valuation, the shares could look inexpensive in hindsight."
Kalinowski also believes that Chipotle's short term prospects are extremely bright.
"Based upon favorable feedback from our industry sources, we raise our Q3 same-store sales forecast for Chipotle Mexican Grill by +450 basis points to 19.5%... This drives us to take up our Q3 EPS forecast by +20 cents, to $3.85, four cents above consensus," Kalinowski said.
Chipotle shares are up 0.17% to $671.75 on Thursday.
TheStreet Ratings team rates CHIPOTLE MEXICAN GRILL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHIPOTLE MEXICAN GRILL INC (CMG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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 shows low profit margins."