Will Chipotle’s Stock See Higher Levels Following Its Q4?

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CMG: Chipotle Mexican Grill logo
CMG
Chipotle Mexican Grill

Chipotle (NYSE: CMG) is scheduled to report its fiscal FY2021 results on Tuesday, February 8. We expect Chipotle to beat the consensus estimates for revenues and earnings. The company has reported better than expected revenues and earnings figures in three of the last four quarters. The company did better than its peers during the pandemic as it had been investing in digital technology for a couple of years before, so the transition was seamless. We expect the growth to be led by Digital Sales in the fourth-quarter FY2021 results.

Our forecast indicates that Chipotle’s valuation is around $1981 per share, which is 33% above the current market price of around $1489. Look at our interactive dashboard analysis on Chipotle’s earnings preview: What To Expect in Q4? for more details. 

(1) Revenues expected to be ahead of consensus estimates 

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Chipotle’s revenues for full-year 2020 were $6 billion – up 7% y-o-y despite the pandemic as the Digital sales segment took off. In Q3 2021, Digital Sales accounted for 42.8% of sales. Trefis estimates CMG’s fiscal Q4 2021 revenues to be around $1.86 billion, above the $1.73 billion consensus estimate. Our dashboard on Chipotle’s revenues offers more details on the company’s operating segments along with our forecast for the next two years.

(2) EPS likely to beat the consensus estimates

Chipotle’s Q4 2021 earnings per share (EPS) is expected to be $6.18 per Trefis analysis, above the consensus estimate of $4.78. The company’s net income margin fell in 2020 due to higher operational expenses but increased revenue led to a higher net income as compared to the previous year. The reopening of restaurants, reduction in lockdown curbs, and lower operational expenses are expected to improve the earnings in 2021. Altogether, the company is likely to report an EPS of around $24.64 in FY2021.

(3) Stock price estimate 33% above the current market price

Going by our Chipotle’s valuation, with an EPS estimate for FY2022 of $31.46 and a P/E multiple of 63x translates into a price of $1981, which is 33% above the current market price of $1489.

Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year

Check out how Chipotle Peers fare on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

 Returns Feb 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 CMG Return 0% -15% 293%
 S&P 500 Return 2% -4% 105%
 Trefis MS Portfolio Return 1% -9% 260%

[1] Month-to-date and year-to-date as of 2/3/2022
[2] Cumulative total returns since the end of 2016

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