CMG - Chipotle: Staying The Course After 110+% Rally

2024-06-27 10:04:50 ET

Summary

• We maintain our strong buy rating on Chipotle Mexican Grill, Inc. on the premise of fundamental growth and steady value accumulation.
• Data suggests the company is on a margin expansion journey, supported by same-store growth.
• A comprehensive market share allows pricing power in its end markets and bargaining power over suppliers.
• Although Chipotle Mexican Grill stock has high price multiples, we encourage investors to consider other value pass-through metrics, such as Chipotle's robust ROE.
• A technical vantage point shows that Chipotle stock has experienced significant momentum, which, we think, will resume for now.

Today's article circles back to Chipotle Mexican Grill, Inc. (NYSE: CMG ) , a stock we've covered several times during our tenure on Seeking Alpha. Our first coverage was in September 2022, when we argued in favor of Bill Ackman's outlook on Chipotle. Our rating was successful, as the stock has rallied by approximately 1.12x ever since....

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