Analysts weigh in on Mexican fast food giant Chipotle Mexican Grill, Inc. (NYSE:CMG) and Chinese travel booking giant Ctrip.com International, Ltd. (NASDAQ:CTRP). The analysts reflect on Chipotle’s presentation at the ICR Conference, and Ctrip’s acquisition of Qunar Cayman Islands.
Chipotle Mexican Grill, Inc.
BTIG analyst Peter Saleh has high hopes for Chipotle following the company’s presentation at ICR Conference 2016. The analyst reiterated a Buy rating on the stock, with a price target of $530, which implies an upside of 21% from current levels.
Saleh observed, “To no one’s surprise, the entire discussion focused on the recent food safety issues and the company’s initiatives to prevent another such incident and recover from the recent sales declines. We came away believing the company has the right initiatives and procedures in place to improve its supply chain and regain customer trust, though we expect the sales recovery to take some time. We are maintaining our Buy rating, as we believe the stock has bottomed and, barring any additional cases, reflects a pessimistic financial outlook.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Peter Saleh has a yearly average return of -5.7% and a 20% success rate. Saleh has a -17.9% average return when recommending CMG, and is ranked #2609 out of 3585 analysts.
Out of the 28 analysts polled by TipRanks in the last 3 months, 12 rate Chipotle stock a Buy, 14 rate the stock a Hold and 2 recommend a Sell. With a return potential of nearly 24%, the stock’s consensus target price stands at $553.23.
Ctrip.com International, Ltd.
Oppenheimer analyst Jed Kelly reiterated an Outperform rating on shares of Ctrip.com, while reducing the price target to $60 (from $65), after the company announced that it will buy a “significant minority stake” in Qunar Cayman Islands (NASDAQ:QUNR), a Chinese online travel company.
Kelly commented, “CTRP has declined 27% from its 52-week-high on share dilution concerns, following the acquisition of QUNR. Based on our analysis of QUNR’s minority interest shareswaps, and management discussions, we estimate that CTRP’s diluted ADSs will be 576M (+54% from 3Q) after related transactions are complete. While the dilutive impact is significant, we believe a consolidated entity is the correct strategy, positioning CTRP as the clear winner in China online travel. We estimate that CTRP will eventually control 80-90% of QUNR, and as a result, we are taking an initial stab at a pro-forma model. We are lowering our DCF based price target to $60 from $65 on higher ADSs assumptions.”
According to TipRanks.com, analyst Jed Kelly has a yearly average return of 44% and a 64.5% success rate. Kelly has a 63% average return when recommending CTRP, and is ranked #39 out of 3585 analysts.
As of this writing, all the 11 analysts polled by TipRanks rate Ctrip stock a Buy. With a return potential of 21.5%, the stock’s consensus target price stands at $51.09.