Chipotle Mexican Grill (CMG 1.93%) is expected to soar 35% this year to $2,000 per share, according to Piper Sandler analyst Nicole Miller Regan, who believes it can achieve its long-term growth goals. She raised her price target from $1,835 per share, which itself was 24% above the $1,480 level at which the fast-casual Mexican food chain currently trades.
She also pegged Chipotle as her highest-conviction recommendation for 2021.
Miller Regan says Wall Street's consensus of a 6% gain in comparable-store sales for the current quarter underestimates the strength of the restaurant's business. She believes Chipotle will be able to effectively tap into its employees, its operational capabilities, and the technological investments the chain has made to continue growing.
Chipotle was able to navigate the restaurant industry downdraft brought on by the pandemic by quickly shifting to mobile ordering and delivery. Because its model was already takeout-friendly, closing its dining rooms didn't have the same impact as it had on other chains without an established and robust off-premise business.
For example, digital orders last quarter tripled over the year-ago period, and management is so confident in its future success that it is resuming its expansion plans that it put on hold at the outset of the coronavirus outbreak. And will be raising menu prices.
In a note to investors, Miller Regan reiterated Chipotle Mexican Grill was her top investment recommendation, even as the chain prepares to release earnings on Tuesday.