Shares of Chipotle Mexican Grill fell 4% in buying and selling Wednesday, regardless of crushing earnings estimates and reporting its highest same-
Shares of Chipotle Mexican Grill fell 4% in buying and selling Wednesday, regardless of crushing earnings estimates and reporting its highest same-store gross sales progress in additional than two years.
Analysts are pointing to the inventory’s excessive valuation.
Within the final 12 months, the inventory has soared 84% to $797 per share, giving it a market worth of $23 billion. The common analyst worth goal for Chipotle shares is $844.22, based on Refinitiv. The inventory hit a file excessive in July and stored climbing, peaking at $857.90 a share in early September.
Chipotle’s inventory is buying and selling at almost 49 occasions its ahead earnings estimates and 64 occasions its prior 12-month earnings, based on Refinitiv.
Its opponents within the restaurant sector have a lot decrease price-to-earnings ratios. Shares of Yum Brands, the mother or father firm of Taco Bell, and Starbucks commerce for 26 occasions every firm’s ahead earnings, Refinitiv information present. After McDonald’s shares slid Wednesday on its lackluster third-quarter earnings, the restaurant big’s inventory is buying and selling for 23.6 occasions its ahead earnings.
Jack in the Box, which has a market worth of $2.2 billion, has roughly 300 fewer shops than Chipotle and lags its annual gross sales by about $300 million. The fast-food chain’s inventory trades for 17 occasions its ahead earnings, based on Refinitiv.
Morgan Stanley analyst John Glass wrote in a word that Chipotle’s share…