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CMG: A $3,460+ Stock Price by Year-End 2027?

Back in September 2014, we published a note (for a former employer) entitled “CMG: A $1,300+ Stock by Decade’s End?” At the time, CMG shares traded at about $671 per share. As it turns out, despite highly challenging food-safety issues that led to five straight quarters of negative same-store sales over Q4 2015-Q4 2016, CMG stock ended 2020 at $1,480 per share – meaningfully above $1,300. What might a similar analysis today suggest about where CMG shares might end up in about five years’ time, at year-end 2027?

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7:00 AM

CMG (Post-Call): Spicy Growth in a Difficult Consumer Environment

After today’s (Tuesday’s) market close, Chipotle Mexican Grill reported adjusted Q3 EPS of $9.51, ahead of our $9.20 forecast as well as sell-side consensus (according to Consensus Metrix) of $9.19. We attribute the earnings beat primarily to a more favorable-than-forecasted adjusted tax rate (23.4% actual vs. 26.0% projected). By our calculations, if the Q3 adjusted tax rate had been 26.0% (which was also consensus heading into today), then Q3 adjusted EPS would have been $9.18.

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6:33 PM

CMG: An Update on Unionization Efforts at Chipotle

In late June, employees of a Chipotle Mexican Grill restaurant in Augusta, Maine became the first to officially seek to unionize. On June 22nd, the Kennebec Journal (of Maine) reported that “Workers at the Augusta Chipotle Mexican Grill are forming a union that could make it the first such unionized restaurant in the nation if the effort succeeds. A majority of workers at the restaurant located at the Marketplace at Augusta signed union cards expressing their intent to join a to-be-formed new union, Chipotle United, according to Brandi McNease, one of the crew members at the restaurant and leader of efforts to unionize her fellow workers.” For more info:

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11:00 AM

CMG: Unionization Risks Tick Up as First Chipotle Restaurant Seeks to Unionize

Employees of a Chipotle Mexican Grill restaurant in Augusta, Maine are apparently the first to officially seek to unionize. The Kennebec Journal (of Maine) reports that “Workers at the Augusta Chipotle Mexican Grill are forming a union that could make it the first such unionized restaurant in the nation if the effort succeeds. A majority of workers at the restaurant located at the Marketplace at Augusta signed union cards expressing their intent to join a to-be-formed new union, Chipotle United, according to Brandi McNease, one of the crew members at the restaurant and leader of efforts to unionize her fellow workers. A letter was signed by several employees who in a show of solidarity were on hand to deliver it together to an onsite manager Wednesday morning, a copy of which was also sent to Chipotle’s corporate offices. It states that a majority of the Augusta location’s crew ‘wish to be represented by Chipotle United for the purposes of collective bargaining.’” For more info:

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7:00 AM

CMG (Post-Call): Same-Store Sales Trends Improve; Tax Rate Helps Q1 EPS

After today’s market close, Chipotle reported adjusted Q1E EPS of $5.70. This was slightly below our $5.75 estimate, but slightly above sell-side consensus (according to Consensus Metrix) of $5.66. However, the adjusted Q1 tax rate came to 16.7%. This was meaningfully more favorable than our 25.0% forecast and consensus of 25.0%. We calculate that this difference between the actual adjusted tax rate and our 25.0% forecast helped Q1 EPS by about +59 cents.

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5:46 PM

CMG: Dear Chipotle Mexican Grill, Will You Be Our Valentine?

Shares of CMG are down by -10.7% year-to-date, modestly underperforming the S&P 500’s -7.3% decline. Since we initiated coverage of Chipotle Mexican Grill on November 15, 2021, CMG shares have declined by -15.1%, versus the S&P 500’s -5.6% decrease. This provides some context for the following fundamental items that, in our view, have improved since mid-November:

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7:00 AM

CMG: Kalinowski Equity Research Initiates Coverage of Chipotle Mexican Grill

Amongst the positives and opportunities for Chipotle Mexican Grill (CMG) are its great-tasting food that is responsibly sourced, (2) its speedy service, (3) Chipotle’s status as the largest concept in the fastest-growing major segment (fast-casual) of the U.S. restaurant industry, (4) the company’s growing use of “Chipotlanes,” units with drive-thrus that feature a Chipotle take on that method of service, (5) Chipotle’s digital capabilities, which are amongst the very best in the restaurant industry (and which also include over 24.5 million loyalty-program users as of the end of Q3), (6) the pace of menu innovation, which is quicker than it usually has been in Chipotle’s history, (7) Chipotle’s status as a highly-desirable tenant for prime real-estate locations, (8) Chipotle’s high (and growing) degree of cultural relevancy, and (9) Chipotle’s “Real Foodprint” sustainability impact tracker, which resonates in particular with younger folks.

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4:10 PM
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