The restaurant chain’s stock shares and earnings are projected to continue to rise
Even though Chipotle dealt with a major health crisis back in 2015-2016 when there was an E. coli outbreak, that seems to not have damaged the restaurant chain’s reputation and stock price. The shares of the restaurant chain have soared nearly 55% this year, making it the fourth-best performer in the S&P 500. This year’s stock pop follows a 57% gain last year when Chipotle had done so well that it’s now trading at about $667.
Since Brian Niccol, the former head of Yum Brands-owned Taco Bell, took over the company in early 2018, there were major changes made to shake up the menu and embrace digital ordering. Therefore, Chipotle started adding new salad bowls that could work for consumers on paleo and ketogenic diets, as well as more options for vegans and vegetarians.
Chipotle’s first-quarter results clearly show the company’s woes are now a thing of the past. Total revenue surged 13.9% and sales at restaurants open at least a year were up nearly 10%. Digital sales more than doubled and now account for about 16% of total revenue. Niccol stated back in February: “We are definitely under a digital transformation at Chipotle.”
Many Wall Street analysts believe Chipotle’s momentum will continue, and overall sales are expected to increase more than 10% this year, while 2020 earnings are projected to rise at a nearly 30% clip for the next five years. Moreover, eight analysts now have a price target on Chipotle that’s higher than ever, including one analyst who believes the stock could hit $820, nearly 25% above current levels.