Chipotle could surge 14% in 2021 as continued menu innovation and higher delivery prices sustain growth, Wedbush says
Mary Meisenzahl / Insider
- Chipotle stock could gain 14% in 2021 as the Mexican grocery chain continues to grow during the pandemic, a team of Wedbush analysts said Monday.
- Growth drivers include traction in digital and delivery sales, as well as continued menu innovation, including the introduction of cauliflower rice and lifestyle bowls, the analysts said.
- Chipotle’s shares are up 65% over the past twelve months. The food chain rose 1.3% on Monday.
- See Chipotle trading live here.
Chipotle is poised to accelerate in 2021, a team of Wedbush analysts led by Nick Setyan said in a note on Monday.
Analysts expect the stock to hit $ 1,600 in 12 months, up 14% from current levels. They also have an “outperform” rating on Chipotle. The shares of the Mexican fast-casual chain even gained 1.3% on Monday. The stock is up 65% over the past twelve months.
Wedbush expects the company to continue growing due to the growth in digital sales and deliveries, especially as consumers order online to avoid in-store interactions during the pandemic. Analysts have increased store sales growth estimates for the fourth quarter of 2020 due to the continued strength of digital and delivery sales.
Continue reading:Goldman Sachs plans to buy those 29 stocks for the strongest sales growth by year-end
“The drivers of SSS growth remain with digital / delivery, continued menu innovation (quesadillas, cauliflower rice, lifestyle bowls), the potential benefits of growing loyalty membership, higher delivery prices, higher marketing spend and market share opportunities,” the analysts said.
They added that Chipotle’s new cauliflower rice bowl feature was a “hit” and there was no observed consumer backlash associated with Chipotle’s 2-3% increase in delivery price.
As a sign that the restaurant has continued to grow during the pandemic, it announced Monday that it plans to recruit 15,000 new team members through its first national hiring event of the year, Coast to Coast Career Day.