Chipotle Mexican Grill, Inc. (NYSE:CMG) is one of the stocks highlighted as Jim Cramer responded to questions from Harvard Business School students. Noting that the stock has been getting crushed recently, a student inquired where the stock will go. Cramer said: “I don’t know. I mean, Chipotle, I think, has probably settled down. It’s, probably would go down to 23, 24 times earnings. It means it could still break down a little bit more from here. I don’t like, it’s too expensive. That’s what happened. Not ...

Chipotle Mexican Grill, Inc. (NYSE:CMG) is one of the stocks Jim Cramer spoke about recently. Cramer discussed the role of Brian Niccol when he was the CEO of the company. He said: “Consider the case of Chipotle, which admittedly needs another turnaround after today’s beatdown. But I’m talking about the old Chipotle. This company fell on hard times in 2015… Chipotle brought in Brian Niccol, a rising star from Taco Bell… Installing him as CEO at the time, I don’t know, I was skeptical, putting someone in w ...

Core Insights - Chipotle Mexican Grill has experienced a significant decline in stock performance following a disappointing third-quarter earnings report, with the stock dropping 17% in response to concerns over pricing and customer spending [1][2][4] - The stock is now down 50% from its peak in December, marking the largest drawdown since the E. coli crisis a decade ago [2] Financial Performance - In the third quarter, comparable sales increased by only 0.3%, while revenue rose by 7.5% to $2.99 billion, falling short of estimates of $3.02 billion [4] - Restaurant-level operating margin decreased from 25.5% to 24.5%, and overall operating margin fell from 16.9% to 15.9%, indicating profitability but a downward trend [5] - Adjusted earnings per share increased from $0.27 to $0.29, aligning with estimates, but management anticipates comparable sales to decline in the low-single-digit range for the year [5] Challenges Facing the Company - The company is grappling with persistent macroeconomic pressures, particularly affecting its key demographic of 25- to 35-year-olds, who are reducing discretionary spending [6][7] - Economic headwinds such as inflation and a weakening labor market are contributing to lower spending from lower-income customers, a trend that has intensified [7] - Management expects these challenges to persist for at least the next few quarters, with growth recovery appearing difficult [8] Future Outlook - Chipotle is likely to face ongoing struggles in returning to growth as long as its customer base remains challenged, with expectations that the situation may worsen into the first quarter of 2026 [8] - Despite introducing new menu items, such as red chimichurri, these efforts have not mitigated the impact of macroeconomic headwinds [8]

Core Insights - Chipotle Mexican Grill's shares dropped as much as 19% in morning trading after the company lowered its full-year same-store sales forecast for the third consecutive quarter, resulting in a 45% decline in stock value this year and a market capitalization of approximately $43 billion [1] - At least five Wall Street analysts have revised their price targets downward, reflecting concerns over the company's declining traffic and negative outlook [1] Sales Performance - In the third quarter, Chipotle reported a same-store sales increase of 0.3%, but experienced a decline in customer traffic [3] - The average price of Chipotle's burritos and bowls is around $10, yet consumers often perceive the average prices to be closer to $15, similar to its fast-casual competitors [3] Analyst Commentary - Citi analyst Jon Tower expressed uncertainty about the sales bottom due to various factors affecting demand, lowering his price target from $54 to $44 per share [2] - BTIG analyst Pete Saleh noted surprise at the significant traffic decline and questioned whether affordability concerns were the primary issue driving this weakness [4]

Group 1 - Chipotle Mexican Grill is expected to report third-quarter earnings with a same-store sales increase of 0.4% anticipated for 2025, marking the first growth after a slow start to the year [1] - The company previously revised its full-year same-store sales growth outlook from a low-single-digit percentage increase to flat, reflecting a decline in traffic and sales in the first half of the year [2] - Despite weakened demand, CEO Scott Boatwright remains confident in the company's strategy, while other restaurant chains are implementing turnaround plans to boost sales [3] Group 2 - Analysts expect earnings per share of 29 cents and revenue of $3.03 billion for the upcoming report [4]

Core Viewpoint - Chipotle Mexican Grill, Inc. is facing challenges in maintaining its growth status, with concerns raised about its performance in the upcoming quarter, which is seen as critical for the company [1] Company Performance - Chipotle's stock has been significantly impacted, down 30% in the last quarter, making it one of the biggest losers among restaurant chains [1] - Despite the current underwhelming performance, there is potential for a rebound, as the company has a history of bouncing back after management improvements [1] Investment Perspective - While Chipotle is recognized as a potential reversal candidate, there are other AI stocks that may offer greater upside potential and lower downside risk [1]

Core Insights - Chipotle Mexican Grill, Inc. (NYSE:CMG) is identified as a potential comeback candidate after experiencing a 30% decline in the last quarter, with Jim Cramer highlighting its resilience in the restaurant sector [1][2] Group 1: Company Performance - Chipotle has been significantly impacted like many restaurant chains, but it has a history of bouncing back when management addresses issues effectively [1] - The current financial performance of Chipotle is described as unimpressive, yet it is viewed as a strong candidate for recovery [1] Group 2: Industry Challenges - The restaurant industry is facing fundamental challenges, particularly related to the rising costs of beef, which is a major expense for Chipotle [2] - Despite expectations that cattle prices would decrease, they have remained high, affecting the cost structure of Chipotle's offerings [2] Group 3: Investment Considerations - While Chipotle shows potential as an investment, there are other AI stocks that may offer better upside potential and lower downside risk [2]

Group 1 - Chipotle Mexican Grill, Inc. (NYSE:CMG) is facing challenges due to high commodity prices, particularly beef, which significantly impacts its cost structure [1][2] - A clear roadmap for growth is essential for Chipotle to attract investors, but currently, there is a lack of such a strategy [1] - The restaurant industry is experiencing fundamental issues, making it difficult to invest in stocks like Chipotle until commodity prices, especially cattle, decline [2] Group 2 - Despite the potential of Chipotle as an investment, there are other AI stocks that are perceived to offer greater upside potential and lower downside risk [2]

Company Overview - Chipotle Mexican Grill, Inc. (NYSE:CMG) operates a chain of restaurants serving burritos, tacos, bowls, salads, and related menu items [2] Industry Insights - The restaurant industry is facing challenges, particularly related to the price of beef, which is a significant cost for Chipotle [1] - There is speculation that cattle prices may decline, but current trends indicate that beef prices remain high, impacting operational costs for Chipotle [1] Investment Considerations - While Chipotle has potential as an investment, there are other sectors, such as AI stocks, that may offer greater upside potential and lower downside risk [3]

Group 1 - Chipotle Mexican Grill plans to expand into Asia by opening restaurants in South Korea and Singapore through a joint venture with SPC Group [1] - The CEO highlighted that the evolving dining-out business presents a significant growth opportunity in Asia [2] - The company has previously announced plans to enter the Mexican market and expand into the Middle East [2] Group 2 - Chipotle lowered its annual sales growth target and missed quarterly sales estimates due to fewer restaurant visits amid economic uncertainty [3] - The company operates over 3,800 restaurants and aims to open between 315 and 345 new outlets this year, with a long-term goal of 7,000 locations in the U.S. and Canada [4]