Chipotle Mexican Grill (CMG) – A Dip Worth Buying?
Chipotle’s recent stock drop may have spooked some investors, but for those looking for a long-term opportunity, this could be an ideal entry point. Shares have slid 10.6% this year, after the company reported softer-than-expected same-store sales guidance for 2025, forecasting low- to mid-single-digit growth instead of the 5.4% analysts had expected. While the first half of the year may be sluggish, several factors suggest a rebound is coming in the back half of 2025.
One of the key drivers is menu innovation. Chipotle is set to roll out its hot honey chicken systemwide in mid-to-late March after a successful test last year. New menu additions like this, along with continued operational improvements such as upgraded kitchen equipment and supply chain efficiencies, should help drive customer traffic and boost margins. Even potential cost pressures from tariffs on Mexican goods appear manageable, as the company sources only about half of its avocados from Mexico, limiting the financial impact.
Wall Street sees this pullback as an opportunity. UBS maintains a buy rating with a $70 price target, implying nearly 19% upside, while Citi also reiterated its buy rating, highlighting that the introduction of honey chicken could be a near-term catalyst. Even JPMorgan, which holds a neutral stance, noted that Chipotle is becoming “more interesting” at these levels.
For long-term investors, Chipotle’s strong fundamentals remain intact. The company continues to expand its footprint, drive same-store sales growth, and find ways to improve efficiency. If near-term weakness in customer traffic is a concern, it’s worth considering that Chipotle has a strong track record of bouncing back. Those looking for an opportunity to buy a high-quality growth stock at a temporary discount may want to consider taking a position before momentum picks back up.
