Chipotle price hike doesn’t change its ‘strong’ value proposition: Raymond James

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Chipotle Mexican Grill Inc.
CMG,
+1.64%
was upgraded to strong buy from outperform at Raymond James based on recent menu price hikes. Analysts maintained the $1,800 price target. “We believe Chipotle has a very strong value proposition (chicken burrito still sub-$8 in many markets) and that price increases to cover higher wages will result in limited customer resistance,” analysts led by Brian Vaccaro wrote. Wedbush says Chipotle is on the road to “best-in-class store margins” and recent share declines create “a compelling entry point.” Chipotle stock is down 6% over the past three months, and down 1.4% for the year to date. The S&P 500 index
SPX,
+0.19%
has gained 13.1% for 2021 so far. Chipotle confirmed price hikes last week. The higher prices will cover the costs of wage increases that were announced last month.

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