Baird bullish on Chipotle ahead of earnings

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Baird is maintaining a rosy outlook on Chipotle Mexican Grill (NYSE: CMG) ahead of the fast-casual restaurant’s earnings release on April 26.

“We remain confident in the fundamental setup, with a view that brand-specific drivers and recent pricing actions can lead to an upward bias to our 2022-2023 earnings estimates,” a team of analysts led by David E. Tarantino wrote in a note to clients. “Based on this outlook as well as our bullish view of the company’s longer-term growth opportunities, we continue to consider the risk / reward on the shares favorable at current levels.”

To be sure, the team cited risks in supply chain concerns, competition, input costs, dietary concerns, and macroeconomic impacts on growth stocks as potential problems for the stock in the short term. Further, Tarantino advised a spike in avocado prices could have an adverse impact for the upcoming earnings results.

Nonetheless, Tarantino touted Chipotle (CMG) as a resilient stock even against these headwinds.

“With investors appearing increasingly concerned about a recession scenario emerging,

we highlight Chipotle was one of the best-performing restaurant brands during the 2008-2009 recession, likely reflecting the brand’s strong value proposition, ”he wrote.

The team assigned an Outperform rating to shares with a $ 1900 price target.

Read more about why Chipotle is a favorite at Cowen as well.

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