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There may be some short-term bumps in store for Chipotle (CMG) – but there is significant upside beyond that according to veteran Hedgeye Restaurants analyst Howard Penney.

After (correctly) being one of the company’s biggest bears, Penney has become one of its most vocal bulls. His analyst team is very bullish on Chipotle over the longer term and believes it could have enormous upside for the stock in two to three years.

That said, the next couple of quarters could be rocky as the once-beleaguered burrito chain travels Redemption Road to that lofty goal.

“I think the rubber meets the road from [Chipotle CEO Brian Niccol’s] pass that he’s getting to a certain degree because there hasn’t been any substantial improvement in the operating performance of the company,” Penney explains in the clip above.

“And I think that’s really going to boil down to fiscal ’19 guidance. There is a recovery in place, but the question then becomes, ‘How big is the recovery?’”

If Penney’s call is correct, that recovery could be very big.

After the company’s health scandals, many in the industry wondered which restaurant chain would become the next Chipotle. As Penney declared in a recent institutional client call, “Chipotle is the next Chipotle.”

Watch the full clip above for more.

We're Very Bullish on Chipotle (But the Road May Be Rocky) - investing ideas