Many Growth Levers Available to Chipotle
Third-quarter sales trends raise some questions, but the company’s narrow moat is still intact, writes Morningstar's R.J. Hottovy.
Like last quarter, the key question coming out of
We're not planning meaningful changes to our $675 fair value, with only modest adjustments to our comp and store opening assumptions (management plans to open 220-235 new restaurants next year, slightly ahead of our forecast and likely establishing a new baseline for annual unit growth). We also believe the company is still positioned to deliver restaurant and operating margins of 28% and 19%, respectively, for the full year (with lower food costs helping to offset higher labor costs), and exceed 30% and 22% over the next five years, keeping Chipotle among industry leaders.
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