Zacks Investment Research upgraded shares of Chipotle Mexican Grill, Inc. (CMG) from NEUTRAL to OUTPERFORM on August 29, 2014, with a target price of $813.00.
We upgrade our recommendation on Chipotle to Outperform from Neutral mainly driven by stellar second-quarter 2014 results. Earnings of $3.50 per share beat the Zacks Consensus Estimate by 14.8% and also increased 24% year over year on the back of solid top-line growth. Revenues also beat the consensus mark and increased 29% year over year, thanks to higher comps and unit expansion. Despite the recent price hike, comps grew year over year as well as sequentially driven by higher traffic. The company has been witnessing a fairly stable traffic trend over the past few years driven by strong market position, innovative menu launches and increased media exposure. We believe that Chipotle will be able to keep its growth story intact by serving antibiotic-free meats and organic menu items to its loyal health-conscious customers.
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