Chipotle Stock Rises After Unexpected Menu Price Hike: Retail Welcomes Costlier Burrito Bowls
By Stocktwits Inc | First Published Dec 5, 2024, 1:17 AM ISTAnalyst firm Truist has raised the price target on Chipotle, known for its smaller menus, to $74 from $72 and kept a ‘Buy’ rating
Chipotle Mexican Grill's ($CMG) stock was up 4% on Wednesday afternoon after the popular fast-food chain announced it would increase menu prices nation-wide, with retail investors cheering the move.
“For the first time in over a year, we have taken a modest price increase of approximately 2% nationally to offset inflation,” Chief Corporate Affairs Officer Laurie Schalow was quoted by WSJ as saying.
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Earlier on Wednesday, analyst firm Truist raised the price target on Chipotle, known for its smaller menus, to $74 from $72 and kept a ‘Buy’ rating, The Fly.com reported.
According to Truist, Chipotle raised menu prices by 2% at about 20% of its stores in the past week, which it “believes is the start of a system-wide rollout.”
According to the WSJ report, Chipotle tried to offset higher costs for its avocados, queso, and sour cream and win over price-conscious consumers but ultimately settled for a “modest” price increase.
Truist sees the menu hike as a “positive” for the stock, taken from a "from a point of strength," said the firm noting Chipotle’s credit card data showed strong traffic in November with "no clear red flags with operating cost inflation."
However, according to the Fly, the analyst warned that the revised estimates are not adjusted into Chipotle's Q4 guidance or the firm's prior 2025 numbers.
Retail sentiment on the stock improved to ‘extremely bullish’ from ‘neutral’ a week ago, while message volumes continued to be in the ‘high’ zone.
Many Stocktwits users welcomed the move.
CMG stock is up 41.8% year-to-date.
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