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Cowen raises its price target on Chipotle to a Wall Street high

on Sep 8, 2021
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  • Cowen's Andrew Charles sees another 18% upside in Chipotle stock.
  • Joe Terranova discusses the bullish call on CNBC's "Halftime Report".
  • BTIG's Peter Saleh also raised his price target on CMG on Wednesday.

Shares of Chipotle Mexican Grill Inc (NYSE: CMG) are about 50% up year-to-date, and Cowen says there’s more to come in the upcoming months.

In a note on Wednesday, Cowen’s Andrew Charles reiterated Chipotle at ‘outperform’ and raised his price target from $2,080 to a Wall Street high of $2,250 that represents another 18% increase from here.

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Charles’ thesis for raising the price target

Charles is confident that the American chain of fast-casual restaurants will note better-than-expected comparable sales this year, helping menu innovation and a wider ad budget that will drive more demand in the future.  

On top of that, the analyst added, Chipotle’s loyalty program was also being well-received, with 24 million active members already in close to two years.

Charles had named Chipotle as a “best idea for 2021” and pointed to the company’s “symbiotic playbook focused on digital, loyalty, social responsibility and menu innovation.”

Joe Terranova: “the price target is a little too optimistic”

Commenting on Cowen’s bullish call, Virtus Investment Partners’ Joe Terranova said he was “happy to hold the position”, but the price target was “a little too optimistic”. On CNBC’s “Halftime Report”, he said:

“I believe in the transformation of what they are doing with mobile/digital ordering. But there are challenges ahead like food inflation and wage inflation. So, I think Cowen’s price target is a little rich. Let’s get above the all-time high of $1,940, and then we could talk about $2,000. Then, down the road, we’ll think about $2,240.”

Also on Wednesday, analyst Peter Saleh of BTIG reaffirmed his ‘buy’ rating on Chipotle and raised his price target from $1,850 to $2,150. The $53 billion company now has a price to earnings ratio of 92.83.