Just yesterday, we revealed that Sweetgreen (NYSE:SG) was about to be sued by Chipotle (NYSE:CMG) over the name of its latest dish: the Chipotle Chicken Burrito Bowl. Now, Sweetgreen has announced it’s changing the bowl’s name and, thus, is taking itself off the landing pad for the hefty Chipotle lawsuit that was about to hit. Sweetgreen stock took off like a rocket, up over 8.5% at the time of writing. Meanwhile, Chipotle’s stock slipped fractionally.
The trouble reached its apex point yesterday when, after a cease-and-desist letter failed to catch Sweetgreen’s attention, Chipotle leveled a lawsuit at Sweetgreen. Sweetgreen rolled out a new product item known as the Chipotle Chicken Burrito Bowl, a bowl that offered a variety of ingredients, including a chipotle salsa. Chipotle didn’t object so much to the salsa so much as it did to the use of similar color schemes and fonts to Chipotle’s own in Sweetgreen’s promotion of said bowl.
Now, Sweetgreen has shifted the new item’s name to the “Chicken + Chipotle Pepper Bowl,” which will be formalized eventually. Chipotle, for its part, is “pleased” with the outcome and will settle the lawsuit accordingly. This is actually the first non-salad item that Sweetgreen has produced, notes a report from CBS News. Sweetgreen calls it “…the latest iteration of Sweetgreen’s menu innovation strategy…” Such a strategy is vital these days as an economic downturn threatens disposable income and potential revenue accordingly.
However, the disparity between Sweetgreen and Chipotle remains. Sweetgreen is considered a Moderate Buy by analyst consensus. However, thanks to its average price target of $11.17, it offers investors 49.23% upside potential. Chipotle, meanwhile, is considered a Strong Buy by analyst consensus. It, however, offers 10.54% upside potential thanks to its average price target of $1,858.10.
