Chipotle Mexican Grill (CMG) has maintained its "Buy" rating from BofA Global Research, with a price objective of $71, despite a recent dip in its stock price. The report highlights that Chipotle's Q4 2024 earnings were in line with expectations, with a focus on improving restaurant-level margins (RLM) and transaction volumes post-Q1 2025. The company anticipates that transaction growth will rebound after overcoming calendar and weather-related headwinds, with menu innovations like the March launch of hot honey chicken and increased marketing efforts expected to drive sales.
BofA notes that while January's -2% transaction comp raised concerns, the underlying trend remains stable when accounting for a 400 basis point headwind from calendar shifts and weather closures. The report suggests that Chipotle's restaurant margins will peak in Q2 and Q3 2025, aided by seasonal volume increases and easing wage inflation pressures. The firm maintains its 2025 EPS estimate at $1.34, supported by lower store expenses offsetting reduced same-store sales growth (SSSG).
Chipotle's current stock price is $56.70, down 3.93% from the previous close of $59.02.