• HEDGEYE’S MARKET BRIEF
    Our FREE Investing Newsletter
    Get Exclusive Summer Sale Discounts

    By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails. Not available for current subscribers to that product. Use of Hedgeye and any other products available through hedgeye.com are subject to our Terms Of Service and Privacy Policy New users only.

Editor's Note: For information on accessing our in-depth institutional research email sales@hedgeye.com.

Chipotle Will Be The Next Chipotle (50%+ Upside)   - zzm

Chipotle (CMG) is on the Hedgeye Restaurants Best Ideas list as a LONG 

We hosted a Black Book presentation yesterday to discuss our LONG case for Chipotle (CMG). We hit on the singles and doubles CMG plans to hit, before they turn on the marketing machine, which is CEO Brian Niccol’s specialty.

We believe consensus is far too bearish on the outward looking margin profile of the business! In the Black Book we take you through line by line how we see the next three and a half years unfolding for CMG, getting to 2021 where we have EPS roughly 50% higher than consensus.

CMG’s enabling of technology and mobile ordering is different than when MCD or SBUX tried to do it because they are actually adding capacity! CMG will have the second make-line installed in approximately 1,000 restaurants by the end of 2018 – if CMG was capable of doing $2.5M AUV with one make-line we think it is conceivable they can do $3M+ with two!

This recovery won’t happen in a straight line, but with a vastly improved management team in place, with a plan to succeed in this new operating environment, we believe CMG represents one of the best LONG opportunities in the restaurant space.  

Chipotle Will Be The Next Chipotle (50%+ Upside)   - cartoon of the day