Earnings Update: Here's Why Analysts Just Lifted Their Chipotle Mexican Grill, Inc. (NYSE:CMG) Price Target To US$2,648

Shareholders of Chipotle Mexican Grill, Inc. (NYSE:CMG) will be pleased this week, given that the stock price is up 11% to US$2,667 following its latest yearly results. It was a credible result overall, with revenues of US$9.9b and statutory earnings per share of US$44.34 both in line with analyst estimates, showing that Chipotle Mexican Grill is executing in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Chipotle Mexican Grill after the latest results.

Check out our latest analysis for Chipotle Mexican Grill

Taking into account the latest results, the current consensus from Chipotle Mexican Grill's 27 analysts is for revenues of US$11.2b in 2024. This would reflect a meaningful 14% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 18% to US$53.03. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.2b and earnings per share (EPS) of US$53.15 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 9.0% to US$2,648despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Chipotle Mexican Grill's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Chipotle Mexican Grill analyst has a price target of US$3,100 per share, while the most pessimistic values it at US$1,800. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 15% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.8% per year. So it's pretty clear that Chipotle Mexican Grill is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Chipotle Mexican Grill going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Chipotle Mexican Grill that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.