Earnings Preview: What To Expect From Chipotle Mexican Grill's Report

Newport Beach, California-based Chipotle Mexican Grill, Inc. (CMG) is a leading player in the quick-casual dining sector, specializing in fresh Mexican cuisine. With a market cap of $81.4 billion, it operates restaurants offering a focused menu that includes burritos, tacos, and salads, while emphasizing high-quality, sustainably sourced ingredients. The company is expected to release its fiscal Q3 earnings results after the market closes on Tuesday, Oct. 29.

Ahead of this event, analysts project the Mexican food chain company to report a profit of $0.24 per share, reflecting an increase of 4.4% from $0.23 per share in the year-ago quarter. The company holds a solid track record of consistently surpassing Wall Street's bottom-line estimates in the last four quarterly reports. In the most recent quarter, CMG surpassed the consensus estimate by 9.7%.

For fiscal 2024, analysts forecast CMG to report EPS of $1.08, up 20% from $0.90 in fiscal 2023. 

Over the past 52 weeks, Chipotle Mexican Grill surged 67%, outperforming the broader S&P 500 Index's ($SPX) 34.8% gain and the Consumer Discretionary Select Sector SPDR Fund's (XLY) 24.6% increase over the same time frame. 

Despite reporting better-than-expected Q2 adjusted EPS of $0.34 and revenue of around $3 billion on Jul. 24, shares of Chipotle Mexican Grill fell 1.9% the following day due to concerns about margin pressure and the impact of rising operational costs from recent menu price increases. Investors were particularly apprehensive about the company's forecast for a decline in restaurant-level operating margins to around 25% in Q3. Moreover, the stock dipped 7.5% on Aug. 13 after CEO Brian Niccol announced his departure for Starbucks, causing investor panic over leadership uncertainty despite strong growth under his tenure. 

Analysts' consensus view on Chipotle Mexican Grill stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 30 analysts covering the stock, 20 suggest a "Strong Buy," one gives a "Moderate Buy," and the remaining nine recommend a "Hold." This configuration is slightly more bullish than three months ago, with 19 analysts suggesting a "Strong Buy." The average analyst price target for CMG is $63.32, suggesting a potential upside of only 6.4% from current levels. 

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On the date of publication, Sohini Mondal 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.