Chipotle Mexican Grill Q3 Results Top Estimates; Street Says Buy

Fast casual restaurants chain operator Chipotle Mexican Grill, Inc. (CMG) has reported better-than-expected results for the third quarter ended September 30, 2021. The strong results can be primarily attributed to the growth witnessed in revenues.

Following the earnings release, shares of the company declined marginally to close at $1,829.75 in extended trade.

Chipotle reported quarterly revenues of $2 billion, up 21.9% year-over-year. Moreover, the figure surpassed the consensus estimate of $1.93 billion. The growth in revenues was mainly driven by an 8.6% year-over-year rise witnessed in digital sales to $840.4 million, which made up roughly 42.8% of the total sales.

The company reported earnings per share (EPS) of $7.02, an increase of about 87% year-over-year. Further, the figure topped the consensus estimate of $6.26 per share.

In other operating metrics, the company’s restaurant level operating margin stood at 23.5%, up 400 basis points from the prior-year period. As of September 30, 2021, the company had $1.2 billion in cash, investments and restricted cash with access to an additional $500 million in the form of untapped credit facility.

The CEO of Chipotle, Brian Niccol, said, “Chipotle’s third quarter results demonstrate strong momentum in our business fueled by a multi-pronged strategy and a passionate team that’s delighted to welcome more guests back into our restaurants.” (See Chipotle stock chart on TipRanks)

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On October 21, Stephens analyst James Rutherford reiterated a Buy rating on the stock with a price target of $2,150, which implies upside potential of 16.6% from current levels.

Consensus among analysts is a Strong Buy based on 17 Buys and 3 Holds. The average Chipotle price target of $2,100.83 implies upside potential of 13.9% from current levels.

Chipotle scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 41.8% over the past year.

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