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UPDATE: Wunderlich Securities Reiterates On Chipotle Mexican Grill On Raised Estimates

Dwight Einhorn

In a report published Wednesday, Wunderlich Securities analyst Robert M. Derrington reiterated a Hold rating on Chipotle Mexican Grill (NYSE: CMG), and raised the price target from $542.00 to $560.00.

In the report, Wunderlich Securities noted, “We are raising our estimates for Chipotle Mexican Grill (CMG), reflecting our belief that the company has virtually completed its rollout of higher menu prices, and sooner than we projected. That's projected to push our Q2 SSS to 11.0% from 8.0% and EPS to $3.10 (Street $3.07) from $3.01. Factoring negligible consumer pushback to ~5.5% menu pricing, we have raised our 2014 SSS to 11.1% from 8.1%. Including some price-induced easing of COGS, we have raised 2014 EPS to $12.60 (Street $12.61) from $12.25 and 2015 EPS to $16.00 (Street $16.05) from $15.25. Despite our revised projections, we believe CMG appears fairly valued, recently trading at 46.5x our 2014 and 36.7x 2015 EPS. Factoring a 35x P/E to our 2015 EPS, we are raising our PT to $560 from $542; we reiterate our Hold rating.”

Chipotle Mexican Grill closed on Tuesday at $586.59.

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