Thursday, July 10, 2008

Global repricing continues, Chipotle gets knocked down by S&P.

Just checked in with S&P and read the following on Chipotle, posted 7/10/08:

We believe recent weakness in CMG shares conforms to S&P's updated economic forecast, which calls for contractions in Q4 and Q1 '09, and weakness through '09. With the view that most of this stock's valuation is derived from future growth, we think it is particularly vulnerable to even slight changes in expectations. We trim our '08 revenue growth forecast from 26.5% to 25.0% and '09's from 18.4% to 17.0% and reduce our EPS estimates for '08 and '09 by $0.05 and $0.20, respectively, to $2.60 and $3.00. On revised DCF analysis, we cut our target price by $27 to $83.
Not surprising, given the economic picture. Looking forward to tuning in on the 23rd and hearing Ells' take on the quarter. I have nothing empirical to base this on, but I'm still expecting an upside surprise given the beating the stock has taken over the last week. or so.

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