RBC Cuts Chipotle Mexican (CMG) EPS but Not Price Target

RBC Capital analyst, David Palmer, cut estimates on Chipotle Mexican Grill (NYSE: CMG) but maintained his PT due to the short term nature of the recovery. No change to Outperform rating.

The 2016 EPS estimate drops from $8.06 to $6.46 (-57% YOY) to reflect weaker than expected quarter to date SSS trends (-26% vs. cons. -23%) and worse than expected near-term profitability. The 2017 EPS reduction is less than 2016 because: 1) the same sales recovery should begin in 4Q; and 2) much of the margin degradation is one-time in nature (e.g., couponing to drive trial and up-front investments to bolster food safety).

Accordingly, there is no change to the $500 price target, which is based on 35x 2017 EPS of $14.28 (vs. $15.08 prior).

For an analyst ratings summary and ratings history on Chipotle Mexican Grill click here. For more ratings news on Chipotle Mexican Grill click here.

Shares of Chipotle Mexican Grill closed at $503.00 yesterday.

You May Also Be Interested In

• Natera (NTRA) PT Raised to $270 at BTIG
• American Airlines (AAL) PT Raised to $21 at UBS Ahead of Q2 Earnings
• Cytokinetics (CYTK) PT Raised to $118 at Mizuho