Wall Street Experts Explain Why Your Favorite Fast Food Chain Is the Best Stock to Invest in

Stock experts have concluded that the popular fast food chain is one of the best stocks to invest in due to its long-term potential.

Chipotle Mexican Grill (CMG) is a worthy investment for those looking to make modest returns over the next few years, according to TipRanks Stifel analyst Chris O’Calla.

He has a Buy rating on CMG shares with a $70 price target because the company is growing steadily, NCB Miami reports.

The average price target for next year is around $65, with a high of $72, according to an analysis of 23 Wall Street experts.

Chipotle posted better-than-expected adjusted profit in the third quarter despite lower-than-expected sales. The company also had traffic growth of 3.3 percent.

Chipotle’s comparable restaurant sales growth was 6 percent, which matched Wall Street’s average estimate of 6.2 percent.

O’Call said the network accelerated transaction growth in September and in the fourth quarter, which began in October.

The stock has a fourth-quarter comparable company analysis of “comp” at about 5.5 percent.

O’Calla said figures for the latest quarter indicate full-year returns of about 7.5%.

He believes the company’s menu has played a key role in its stock’s success, and fourth-quarter gross sales will be particularly impacted by smoked brisket sales.

The product caused customers to spend more money online and encouraged more people to buy Chipotle food.

The smoked brisket has been a fan favorite offering, and last month the company announced it would be re-releasing it for a limited time.

“We’ve listened to our guests and are bringing this fan-favorite, innovative menu out of storage three years later,” Chris Brandt, chief brand officer, said in September.

“This premium protein is sure to appeal to guests looking to taste the difference from brisket prepared the Chipotle way.”

In addition to products, O’Call said the company is working hard to improve the speed at which it fulfills customer orders.

Chipotle currently offers about 20 meals in 15 minutes. The company’s goal is to increase this number to 30 meals in the same period of time.

O’Call believes the company’s technological advancements and improved processes make this goal achievable.

Over the summer, the company announced it was developing robots to portion control orders of salads and bowls.

O’Calla said this was part of Chipotle’s response to customer complaints about changing and reducing portion sizes, demonstrating the company’s commitment to its future.

On Tuesday, Chipotle interim CEO Scott Boatwright emphasized the company’s ambitious goals during its third-quarter earnings call.

“I have worked alongside our talented leadership team to develop and evolve our successful strategy, and we will continue to execute on it,” he said, according to QSR Magazine.

“This includes our long-term goals to expand to 7,000 restaurants in North America, grow our AUVs to more than $4 million in sales, and drive restaurant-level revenue and international growth.”

Boatwright also said he believes increasing capacity is possible and noted that they have already done so.

In the third quarter, Chipotle increased its 15-minute entrees by 1.2 times.

Boatwright said, “We’ve already gained a lot of knowledge about innovation from our team and our guests that will be used in future iterations.”

There are approximately 3,500 Chipotle restaurants nationwide. The company wants to add another 315 to 345 locations in 2025.