Chipotle Mexican: Morgan Stanley Lowers PT to $65, Maintains Overweight Rating

Chipotle Mexican: Morgan Stanley Lowers PT to $65, Maintains Overweight Rating

Chipotle Mexican Grill (CMG) has seen a reduction in its price target by Morgan Stanley analyst Brian Harbour, who lowered the figure from $67 to $65. Despite this adjustment, Harbour maintains an Overweight rating for the company. This move follows Chipotle's recent earnings report, which revealed lower-than-expected revenue figures.

The company's fiscal year same-store sales guidance was revised to reflect a low-single digit growth, which is less than previously projected. Morgan Stanley acknowledges that there are no substantial, brand-specific issues affecting Chipotle but notes that this perspective may continue to be a subject of discussion in the near future.

Analysts' Forecasts

Based on the one-year price targets offered by 31 analysts, the average target price for Chipotle Mexican Grill Inc (CMG) is $60.94, with a high estimate of $73.00 and a low estimate of $46.12. The average target implies an upside of 24.98% from the current price of $48.76. More detailed estimate data can be found on the Chipotle Mexican Grill Inc (CMG) Forecast page.

The average brokerage recommendation from 36 firms is currently 1.8, indicating an "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies a Strong Buy, and 5 denotes a Sell. GuruFocus estimates the GF Value for Chipotle Mexican Grill Inc (CMG) in one year to be $60.64, suggesting an upside of 24.36% from the current price of $48.76.

Key Business Developments

Chipotle Mexican Grill Inc reported a sales growth of over 6% to reach $2.9 billion in the first quarter. The launch of Chipotle Honey Chicken has been successful, driving incremental transactions and receiving positive guest feedback. The company opened 57 new restaurants in the quarter, with plans to open between 315 and 345 new restaurants this year. Chipotle is investing in technology and innovation, including the rollout of produce slicers and a new equipment package to improve efficiency. The company maintains a strong balance sheet with $2.1 billion in cash and no debt, allowing for continued investment in growth and innovation.

Challenges Faced

Comparable sales declined by 0.4% in the first quarter, indicating a slowdown in consumer spending. Restaurant level margin decreased by 130 basis points year over year to 26.2%. The company faces headwinds from inflation and higher usage costs, particularly in avocados, dairy, and chicken. Chipotle is experiencing a slowdown in underlying transaction trends due to consumer uncertainty and economic concerns. The impact of tariffs on cost of sales and new store builds remains uncertain, potentially affecting margins and capital expenditures.

Institutional Investor Activity

Capital Research Global Investors acquired a new position in shares of Chipotle Mexican Grill in the 4th quarter, valued at approximately $132,909,000. Other institutional investors also recently modified their holdings of the company, including Ethos Financial Group LLC, Sound Income Strategies LLC, Murphy & Mullick Capital Management Corp, Financial Life Planners, and Oakworth Capital Inc.

Analyst Ratings Changes

KeyCorp decreased their price objective on Chipotle Mexican Grill from $64.00 to $60.00 and set an "overweight" rating. Wells Fargo & Company reduced their price target from $75.00 to $70.00 and set an "overweight" rating. JPMorgan Chase & Co. reduced their target price from $64.00 to $58.00 and set a "neutral" rating. Oppenheimer raised their price target from $65.00 to $69.00 and gave the stock an "outperform" rating. Stifel Nicolaus cut their price objective from $68.00 to $65.00 and set a "buy" rating. Eight investment analysts have rated the stock with a hold rating, twenty have issued a buy rating, and one has issued a strong buy rating. According to data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $65.42.

References:
[1] https://www.gurufocus.com/news/2800521/chipotle-cmg-price-target-cut-by-morgan-stanley-amid-revenue-miss-cmg-stock-news
[2] https://www.marketbeat.com/instant-alerts/capital-research-global-investors-purchases-new-position-in-chipotle-mexican-grill-inc-nysecmg-2025-04-21/