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With a market cap of $89.9 billion, Chipotle Mexican Grill, Inc. (CMG) operates quick-casual Mexican food restaurants. Newport Beach-headquartered Chipotle offers a limited menu of burritos, tacos, burrito bowls, and salads made with free-range, hormone-free pork, natural chicken, and other meat products cooked using traditional methods.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Chipotle fits this criterion perfectly. CMG is renowned for its commitment to serving ethically and naturally produced food with integrity, using ingredients that are free of genetically modified organisms (GMO) and sourced from suppliers who prioritize animal welfare and sustainable farming practices, unlike other American fast-food companies.
Moreover, Chipotle recently hit its 52-week high of $3,359.09 in today’s trading session before pulling back. Moreover, shares of Chipotle have surged 21.4% over the past three months, outperforming the broader Nasdaq Composite's ($NASX) 10.7% gain over the same time frame.
Longer term, CMG stock has gained 64.6% over the past 52 weeks, outshining NASX's 29.2% gains over the same time frame. Besides, CMG is up 46.3% on a YTD basis, surpassing the NASX's 17.8% gains.
CMG has been trading above its 50-day and 200-day moving averages since late October, indicating a bullish price trend.
Chipotle's strong market performance is due to consistent double-digit revenue growth, driven by aggressive expansion efforts, including the opening of 271 new restaurants last year. The company has reported 15 consecutive quarters of double-digit revenue growth, despite ongoing inflationary pressures.
Moreover, shares of Chipotle rose over 6% in the subsequent trading session after the restaurant reported its Q1 earnings results on April 24, which showed a 14.1% revenue increase, driven by a 7% increase in same-store sales, with expectations for mid to high-single-digit percentage growth for the full year. The company also added 47 new restaurants during the first quarter with 43 locations including a Chipotlane.
On June 6, CMG’s shareholders approved a stock split at the company’s annual meeting, marking a significant milestone in the process. This was one of the biggest stock splits in NYSE history and involved an increase in the number of authorized shares of its common stock. Post-announcement, the market reacted positively, sending the stock up 2%.
Nevertheless, to emphasize the stock’s outperformance, it's worth noting that its rival Yum! Brands, Inc. (YUM) is underperforming – not just CMG but the broader equity benchmark. Shares of Yum! Brands have dipped marginally over the past 52 weeks and rose 5.3% on a YTD basis, trailing behind CMG stock’s double-digit returns over the same time frame.
However, analysts are cautiously optimistic about the CMG stock’s outlook. Among the 30 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and the stock currently trades above its mean price target of $3,229.07.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
