Stock market experts revealed that a popular fast food chain is one of the best stocks to invest in due to its long-term potential.
Chipotle Mexican Grill (CMG) is a valuable investment for those looking to make modest profits in the coming years, according to Chris O’Cull, TipRanks Stifel analyst.
He recommended buying CMG shares with a price target of $70 because the company is growing steadily. OCN Miami reported.
According to the analysis of 23 Wall Street experts, the average price target for next year is about $65 with a maximum of $72.
Chipotle posted better-than-expected third-quarter adjusted profits despite making fewer sales than expected. The company also had a 3.3 percent increase in traffic.
Chipotle Mexican Grill (CMG) is one of the best stocks to invest in, according to TipRanks experts
There are more than 3,500 Chipotle locations nationwide and the company plans to expand
Chipotle’s comparable restaurant sales growth was 6 percent, which aligned well with Wall Street’s median estimate of 6.2 percent.
O’Cull said the chain had accelerated transaction growth in September and in the fourth quarter, which began in October.
The stock has a comparable company analysis in the fourth quarter – ‘comps’ – of about 5.5 percent.
This latest quarter’s numbers point to full-year comps of about 7.5 percent, O’Cull said.
He believes the company’s menu has played a key role in the success of its stock and fourth-quarter gross sales will be influenced specifically by smoked brisket sales.
Experts anticipate that the 12-month price target for Chipotle shares will be a high of $72 and an average of $65.16.
This article has caused customers to spend more money at the chain and has encouraged new people to buy Chipotle food.
The smoked brisket has been a fan-favorite offering, and the company announced it would be re-releasing it for a limited time last month.
“We’re listening to our guests and bringing this fan-favorite menu innovation out of the vault after three years,” chief brand officer Chris Brandt said in September.
“This premium protein is sure to delight guests who want to taste the difference from brisket prepared Chipotle-style.”
Products aside, O’Cull said the company has been working hard to improve the speed with which customer orders are fulfilled.
Customers have previously complained about inconsistent portion sizes.
Chipotle has introduced new technology, including a robot, to eliminate mixed portion sizes
Currently, Chipotle serves about 20 meals in 15 minutes. The company’s goal is to increase that number to 30 meals in the same period of time.
O’Cull believes the company’s technological advancements and improved processes make this goal achievable.
Over the summer, the company announced the development of portion control robots for ordering salads and bowls.
This was part of Chipotle’s response to customer complaints about varying and shrinking portion sizes, demonstrating the company’s commitment to its future, as O’Cull described.
On Tuesday, Chipotle interim CEO Scott Boatwright emphasized the company’s expansive goals during a third-quarter earnings conference call.
“I have worked alongside our talented executive team to design and develop our successful strategy, and we will continue to execute it,” he said, according to QSR Magazine.
“This includes our long-term goals of expanding to 7,000 restaurants in North America, growing our AUVs to more than $4 million, and expanding our margins at the restaurant level and growing internationally.”
One of Chipotle’s main goals is to increase the speed with which they serve meals to customers.
Boatwright also said he believes it is possible to increase their performance, noting that they have already done so.
During the third quarter, Chipotle saw an increase of 1.2 more entrees every 15 minutes.
Boatwright said: “We have already received many learnings about innovations from our crew and our guests that will be used in future iterations.”
There are about 3,500 Chipotles nationwide. In 2025, the company wants to add between 315 and 345 more locations.