2023-04-17 06:44:43 ET
Chipotle Mexican Grill ( NYSE: CMG ) is still on track to hit its guidance range of 245 to 270 net store openings in 2023 based on analysis by Cowen of the restaurant operator’s 2023 proxy filing that showed a robust 12-month to 18-month pipeline of site assessment requests.
Analyst Andrew Charles and team also see Chipotle ( CMG ) tracking to meet 2024 store opening expectations. Of note, 90% of the site assessment requests from Chipotle ( CMG ) included a Chipotlane, which could have positive implications on margins.
"Our analysis suggests the midpoint of 2023's guidance of 255-285 gross openings (245-270 net openings including 10-15 relocations for a Chipotlane) implies 61% of 2022's SARs will be opened in 2023. This compares to an average of 65% prior year SARs for 2019-22 development, as shown in the table below. 61% is slightly above 2022's 60%, though we note 2022 openings ended the year at the low end of guidance in a year plagued by industry development delays and headwinds. Consensus models 265 net openings in 2023, slightly lower than our 270 estimate."
On a related note, Cowen does not expect the recent departure of Chief Development Officer Tabassum Zalotrawala to become SVP, U.S. Chief Development Officer at McDonald's ( MCD ) to weigh on Chipotle's development targets.
Cowen has an Outperform rating on Chipotle ( CMG ) and price target of $2,050. Read the latest breakdowns on CMG from Seeking Alpha contributors.
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Chipotle's store expansion is still going strong