Shares of Chipotle Mexican Grill jumped +1.2% Monday, following a rating upgrade from Wedbush.
Analyst Nick Setyan upgraded his rating of the fast food restaurant chain' shares to outperform from neutral. He also boosted his 12-month stock price target from $780 to $980, the highest target of all the analysts surveyed by FactSet.
Setyan indicated that Chipotle is in a leading position to “enable a multi-year streak of mid- to high single digit SSS growth”, amidst a growing focus on digital transaction sin the industry. The analyst also hopes that new menu items like quesadillas, carne asada and white queso would bolster same-store sales growth for Chipotle.
In July, the chain’s second-quarter results revealed that its digital sales nearly doubled. Digital sales surged +99.1%, and contributed to 18.2% of total sales for the quarter. This was the program’s first full quarter since it began.
Setyan mentioned that loyalty would be a strong, key driver of penetration of Chipotle’s own app among consumers. He said CMG would be “at the top of restaurant apps” in terms of its popularity of usage on handheld devices.