Bernstein analyst Danilo Gargiulo has assigned their bullish stance on CMG stock, giving a Buy rating today.
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Danilo Gargiulo has given his Buy rating due to a combination of factors that suggest a potential for long-term growth despite current challenges. Although Chipotle is facing short-term difficulties such as declining same-store sales growth and margin pressures, Gargiulo believes that the company’s long-term compounding capability remains strong. He highlights that Chipotle’s management is actively working on strategies to improve value perception, enhance loyalty program engagement, and increase marketing ROI, which are expected to strengthen the company’s position in the future.
Furthermore, Gargiulo acknowledges that while the stock may trade at a discount in the near term due to ongoing uncertainties, the potential for recovery and growth remains. He anticipates that Chipotle will eventually return to mid-single-digit same-store sales growth, and the company’s efforts to improve operational efficiency and customer engagement will likely lead to a stronger performance. As a result, despite lowering the price target, Gargiulo maintains an Outperform rating, reflecting confidence in Chipotle’s ability to navigate current challenges and achieve sustainable growth.