It's been a pretty great week for Chipotle Mexican Grill, Inc. (NYSE:CMG) shareholders, with its shares surging 11% to US$3,187 in the week since its latest quarterly results. Revenues were US$2.7b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$13.01 were also better than expected, beating analyst predictions by 11%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Chipotle Mexican Grill's 32 analysts is for revenues of US$11.4b in 2024. This reflects a decent 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 18% to US$55.62. Before this earnings report, the analysts had been forecasting revenues of US$11.2b and earnings per share (EPS) of US$53.37 in 2024. So the consensus seems to have become somewhat more optimistic on Chipotle Mexican Grill's earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.8% to US$3,176. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Chipotle Mexican Grill, with the most bullish analyst valuing it at US$3,600 and the most bearish at US$1,950 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Chipotle Mexican Grill's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Chipotle Mexican Grill'shistorical trends, as the 15% annualised revenue growth to the end of 2024 is roughly in line with the 15% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.8% per year. So although Chipotle Mexican Grill is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Chipotle Mexican Grill's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Chipotle Mexican Grill. Long-term earnings power is much more important than next year's profits. We have forecasts for Chipotle Mexican Grill going out to 2026, and you can see them free on our platform here.
Even so, be aware that Chipotle Mexican Grill is showing 1 warning sign in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.