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Chipotle Mexican Grill Inc - Stock Quote CMG

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Morningstar's Chipotle Mexican Grill Inc Stock Analysis

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1-Star Price

PREMIUM

5-Star Price

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Economic Moat

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Capital Allocation

PREMIUM

Surprisingly Resilient Wide-Moat Chipotle Continues to Impress, but Shares Look Fully Valued

Sean Dunlop Equity Analyst

Analyst Note

| Sean Dunlop |

In the face of industry headwinds, wide-moat Chipotle reported strong first-quarter earnings, with $2.02 billion in sales and $5.70 in adjusted EPS slightly exceeding Factset consensus estimates of $2.01 billion and $5.64, respectively. Restaurant margin pressure was unsurprising, with 12%-13% inflation in the food basket proving difficult to pass through in real-time—but a 4% price increase in the quarter, pushing menu prices about 10% higher than a year ago, suggests that guidance for a strong restaurant margin rebound (to 25%) over the summer is plausible. After balancing near-term food cost pressure with strong top line results and muted administrative expenses, we expect to raise our $1,510 fair value estimate by a low-single-digit percentage, broadly consistent with the time value of money.

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Chipotle Mexican Grill Inc's Company Profile

Business Description

Chipotle Mexican Grill is the largest fast-casual chain restaurant in the United States, with systemwide sales of $7.5 billion in 2021. The Mexican concept is entirely company-owned, with a footprint of more than 3,000 stores, heavily indexed to the United States (though the firm maintains a small presence in Canada, the U.K., France, and Germany). Chipotle sells burritos, burrito bowls, tacos, quesadillas, and beverages, with a selling proposition built around competitive prices, high-quality food sourcing, speed of service, and convenience. The company generates its revenue entirely from restaurant sales and delivery fees.

Contact
610 Newport Center Drive, Suite 1400
Newport Beach, CA, 92660
T +1 949 524-4000
Sector Consumer Cyclical
Industry Restaurants
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Cyclical
Employees 97,660

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