Download - Chipotle Mexican Grill Company Analysis James Gaffigan Zachary Hylton Jordan Schwartz Nicholas Pycha
OverviewFounded:1993, Colorado
Industry: fast casual food
1,300 restaurants globally
Restaurant chains in:◦35 states in U.S◦District of Columbia◦Ontario, Canada◦Europe
(Zack's, 2012)
OverviewServes:
◦Burritos and burrito bowls◦Tacos◦Salads
Food with Integrity Policy◦Fresh Ingredients◦local produce ◦Naturally raised animals
(Zack's, 2012)
Investment Decision
Not a good long-term investment
◦Fierce competition: Taco Bell and Qdoba
◦Overvalued stock price/ lack of dividends
◦Current legal issues
(Mussi, 2012)
Jordan Schwartz
SWOT Analysis◦Chipotle vs. Taco Bell
Sustainable resources◦Food with Integrity vs. Cantina Bell
SWOT Analysis
Strengths◦Sustainable resources: Food with Integrity◦Marketing programs◦Minimal growth
Weaknesses◦Irregularities in work authorization
documents ◦Increased labor costs
(EBSCO, 2012) & DATAMONITOR: Yum! Brands, Inc. (2010, September 2)
SWOT Analysis
Opportunities
◦Focus on expansion
Threats
◦Fierce competition
◦Increasing costs
(EBSCO, 2012)
Competitive Factors
Current and potential earningsMergers and acquisitionsAny development of a new productNews
(How the Market Works, 2012)
Business in the News
Rounding price of foodLegal issuesFinancial prospects disclosed incorrectlySubstantial drop in stock price
(Torrisi, 2012) (Olsen, 2012)
Zachary Hylton
Financial Analysis
◦Significant factors
Gross Profit
Net Income
P/E Ratio
Earnings Per Share
(Zack's, 2012)
Gross Profit
Gross Profit (in millions)
0 2,000 4,000 6,000 8,000
QdobaTaco BellChipotle
(Zack's, 2012)
Net Income
Net Income (in millions)
020
040
060
080
0
1,00
0
1,20
0
1,40
0
QdobaTaco BellChipotle
(Zack's, 2012)
Stock Prices
Sept '08 Sept '09 Sept '10 Sept '11 Sept '120
50
100
150
200
250
300
350
400
ChipotleTaco BellQdoba
(yahoo.finance.com)
DividendsCompany Yield Annual Div. Payout Ratio
Chipotle -0- -0- -0-
Yum Brands 1.93% $1.34 .36
(zacks.com)
Nick Pycha
Analyst's Evaluations
◦Standard and Poor’s
◦Zacks Investment
Conclusion: Our recommendation
Standard & Poor’s
Current recommendation: Hold
Risk assessment: Medium risk
Values CMG stock price at $278.20 per
share
◦Overvalued by $58.20 or 17.3%
(Standard & Poor’s, 2012)
Zacks Investment ResearchZacks Rank: 3- Hold
Recommendation: Neutral
Failed to meet estimations
◦Earnings per share
◦Revenue
(Zack's, 2012)