Goldman Sachs is taking a bite out of Chipotle (CMG), initiating coverage of the restaurant chain with a Street high price target of $1,000 and a Conviction Buy rating.
In a note to investors, analyst Katherine Fogertey made the case for the firm’s positive outlook.
“Our bullish view is based on our expectation that same-store sales trends will remain stronger for longer than the market expects,” Fogertey wrote, noting that same-store sales growth would be driven by a strong macro backdrop.
“Our price target is not dependent on multiple expansion, but rather, we take a view that with food safety overhangs in the rearview, the stock performance will be driven by management’s ability to execute on sales driving initiatives.”
Fogertey says Chipotle’s future will be driven by digitals sales. “Digital orders can be processed 40% more efficiently than in-store orders,” Fogertey wrote.
Goldman isn’t just bullish on Chipotle, but some other top names in the sector as well. The firm initiated coverage of McDonald’s (MCD), Starbucks (SBUX), Shake Shack (SHAK) and Wingstop (WING) with Buy ratings.
Bridgette Webb is a producer at Yahoo Finance. Follow her on Twitter@bridgetteAwebb.