Long gone are the days of food-borne illness related selloffs for Chipotle (NYSE: CMG).
The stock has been on a tear and is currently up 83% year-to-date, and neither menu missteps nor trade worries have been able to slow shares down.
It’s no wonder why, then, that analysts are bullish on the stock, with one even saying the stock could climb to $1,000 per share within the next year.
Earlier this week, Goldman Sachs initiated coverage of the stock giving it a Buy rating and a price target of $1,000, indicating possible upside of 26.5% over the next twelve months. The stock has also been added to Goldman’s “Conviction list” with the expectation that strong online sales will drive further growth in the chain.
“By flexing their digital muscle and migrating customers to this channel, the company is able to grow capacity in the stores well beyond prior ‘peak’ in 2014 as well as grow frequency and spend potential,” Goldman’s Katherine Fogertey wrote in a note to clients on Monday.
“Our price target is not dependent on multiple expansion, but rather, we take a view that with food safety overhangs in the rearview, the stock performance will be driven by management’s ability to execute on sales driving initiatives,” Fogertey wrote.
The stock got a boost to a new all-time high last week after the burrito chain reported better-than-expected quarterly earnings fueled by digital sales figures that nearly doubled.
In its most recently reported quarter, Chipotle saw digital sales grow 99.1%, making up 18.2% of sales for the quarter. Goldman says the digital sales will be “a powerful tool to unlock restaurant margin expansion,”
Fogertey also noted that a strong macro backdrop should help to drive Chipotle’s same-store sales growth to 10.1% for 2019 and 8% in 2020.
Goldman isn’t the only firm bullish on the stock. Piper Jaffray analyst Nicole Miller Regan reiterated their Overweight rating on the stock on Wednesday, and boosted their price target to $900 from $824.
Miller Regan wrote that she has a “high degree of conviction around Chipotle shares,” and remains “confident that Chipotle is positioned to support recent top-line momentum and, over time, drive potential upside to consensus expectations.”
The Piper Jaffray analyst argues that Chipotle offers “best in class metrics across a series of sales, operations, cost margins, marketing, and long-term return categories,” which she believes will allow the stock to continue to hit new highs, even after the strong rally seen so far this year.