Time to tear off the temporary tag.
That's the take of the Chipotle Mexican Grill (CMG) analysts at Oppenheimer, who on Monday reiterated an "outperform" rating and a $65 price tag that is about 13% over Friday's close and about in line with the Wall Street average, per Visible Alpha data. The burrito chain in August named COO Scott Boatwright its interim CEO after Brian Niccol departed for Starbucks (SBUX).
"We don't view the CEO change as a meaningful risk-factor with (Chipotle's) deep bench set to execute the company's strategy without interruption," Oppenheimer wrote. "We believe Scott Boatwright is well-positioned to become permanent CEO, a move we would applaud."
Shares of Chipotle, up about 25% in 2024, slipped in the wake of Niccol's move to Starbucks but have since recovered that ground. They were edging upward in recent trading today, holding below year-to-date highs.
Boatright "has been instrumental in (Chipotle's) turnaround/growth strategy since 2017," the analysts wrote. "We believe he has internal backing and would keep a highly-incentivized executive bench in place equipped with the tools to sustain (Chipotle's) momentum."
The company is set to report its first round of quarterly results post-Niccol next month, with a release scheduled for after the market's close on Oct. 29. Since Niccol left, Chipotle has continued issuing a stream of announcements reflecting its recent priorities, including kitchen efficiency and promotional menu items.
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