CMG: Robust Unit Expansion Plans Will Lead to Improved Performance

Analysts have lowered their average price target for Chipotle Mexican Grill, cutting it from approximately $45.09 to $43.18 per share. Ongoing macroeconomic pressures and softer same-store sales trends continue to weigh on the company's near-term outlook.

Analyst Commentary

Recent Street research reflects both cautious and constructive perspectives on Chipotle Mexican Grill, with analysts responding to ongoing industry and macroeconomic challenges as well as the company’s recent performance trends. Multiple firms have lowered their price targets, citing headwinds and near-term uncertainty, but some maintain longer-term confidence in Chipotle's fundamentals and strategic initiatives.

Bullish Takeaways

• Bullish analysts maintain that Chipotle's brand strength and robust unit expansion plans for 2026 support a positive long-term outlook, despite current soft patches.
• Recent upgrades cite increased advertising and targeted marketing efforts, alongside strategic use of limited time offers and higher menu pricing, as drivers of sales improvement in the latest quarter.
• Several believe that management's conservative guidance sets a low bar for same-store sales, potentially positioning the company to exceed expectations if traffic and promotional initiatives gain traction.
• Positive transaction growth trends and Chipotle's continued investment in menu innovation and improved operations are viewed as supportive of eventual comp recovery and valuation upside.

Bearish Takeaways

• Bearish analysts caution that macroeconomic pressures, compounded by softening traffic and a shift among consumers from fast casual dining to eating at home, continue to weigh on near-term performance.
• Guidance for same-store sales growth has been revised downward for several consecutive quarters, raising concerns about execution risk and uncertainty around when growth will reaccelerate.
• Some remain cautious given the ongoing weakness in demand trends, particularly among lower-income and younger demographics, and the firm's inability thus far to fully offset traffic declines with menu or marketing actions.
• A lack of visibility on 2026 guidance and the expectation of negative comps into the fourth quarter keep shares in a "penalty box," with limited valuation support over the next several quarters.

What's in the News

• President Trump is set to cut tariffs on beef, tomatoes, coffee, and bananas. This move could impact grocery prices and several restaurants, including Chipotle Mexican Grill (Bloomberg).
• Chipotle's management anticipates 350 to 370 new restaurant openings in 2026, including 10 to 15 international partner-operated locations. Over 80% of company-owned stores are expected to feature a Chipotlane.
• The company has provided sales guidance for 2025, forecasting full year comparable restaurant sales to decline in the low-single digit range.
• Chipotle recently announced the return of its popular Boorito Halloween promotion, the "Chip-or-Treat" incentive program for Rewards members, and a Build-Your-Own Chipotle family meal option, available as a digital exclusive.
• Significant share repurchases were completed in multiple tranches, totaling over $400 million since July 2025.

Valuation Changes

• Consensus Analyst Price Target has moved lower, dropping from $45.09 to $43.18 per share.
• Discount Rate edged down slightly, shifting from 8.54% to 8.53%.
• Revenue Growth projections increased slightly, from 10.97% to 10.98%.
• Net Profit Margin outlook decreased, going from 13.33% to 12.80%.
• Future P/E has risen marginally, from 32.77x to 32.85x.