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Queso Fail, Other Headwinds Lead This Analyst To Remain Cautious On Chipotle

Courtesy of Benzinga.

Queso Fail, Other Headwinds Lead This Analyst To Remain Cautious On Chipotle

Analysts at Stephens continue to hold a cautious view on Chipotle Mexican Grill, Inc. (NYSE: CMG) despite a recent upgrade. The firm’s Will Slabaugh upgraded Chipotle’s stock to Equal-Weight in August amid a view that the negative media attention the company has been receiving is “well known” and fully digested by investors.

However, it’s important to continue holding a cautious stance on Chipotle’s stock as concerns over the heightened competitive restaurant landscape remain ongoing, Slabaugh commented in a brief report. Other ongoing headwinds include near-term cost pressures that could impact labor and cost of goods sold and the potential for negative earnings per share revisions from Wall Street analysts.

The response to Chipotle’s new Queso launch in September has proven to be disappointing and could result in a smaller than previously expected boost to foot traffic, the analyst added. As a result, the company is likely to report a lower run-rate of same-store sales growth on slowly improving store-level margins.

Finally, Chipotle is expected to report an earnings per share of 97 cents in its third quarter earnings report (scheduled for Oct. 24), which marks a decrease from the analyst’s prior estimate of $1.28 per share. Same-store sales is now projected to fall by 2 percent as opposed to a prior estimate that called for flat growth. This compares to the Street’s consensus estimate of $1.75 per share on a 2.2 percent same-store sales growth.

Related Links:

A Case For Why Chipotle Shares Could Fall Below $250

Chipotle Back At $300 Area: Buy, Sell Or Hold?

Latest Ratings for CMG

Date Firm Action From To
Oct 2017 Stifel Nicolaus Initiates Coverage On Hold
Sep 2017 BMO Capital Maintains Market Perform
Sep 2017 Cowen & Co. Downgrades Market Perform Underperform

View More Analyst Ratings for CMG


View the Latest Analyst Ratings

Posted-In: Queso Restaurant Earnings Stephens Will SlabaughAnalyst Color Restaurants Analyst Ratings General Best of Benzinga


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