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Chipotle stock rises as Wall Street gets bullish on ‘burrito season’

Analysts from UBS and Oppenheimer turn bullish on the fast-food chain stock.

Video transcript

DAVE BRIGGS: My play is Chipotle. Shares surging on UBS reiterating a buy rating on CMG. The note reading, quote, "We see further upside for shares following a 22% move year to date given robust unit development, ongoing margin expansion, and visibility into industry-leading LT growth." Oppenheimer also increasing its price target on the stock from $1,875 from $1,725.

Now, Chipotle will report earnings on Tuesday. Expectations are for revenue of $2.32 billion on EPS of $8.91.

Check out the five-year chart on that stock. It's insane. It's been on a constant tear. The chain announcing they plan to hire 15,000 workers for burrito season, which kicks off next month, and plans to open 285 stores this year.

You can't help but wonder, Seana, if it's like one of those burritos that's just been overstuffed. It's just so full. It's going to explode. You know what I mean. You've had one of those burritos.

SEANA SMITH: I love burritos.

DAVE BRIGGS: The company's been a performer year in and year out. Is it just too expensive?

SEANA SMITH: It looks like it is too expensive, especially from that five-year chart that we just put up. But burrito season, first of all, I never knew that there was a burrito season.

DAVE BRIGGS: I didn't either.

JARED BLIKRE: A season for everything.

SEANA SMITH: I guess it's March to May, and they're saying it's because of the warmer weather, because the more daylight. I guess it gets people very excited to eat those burritos. They're expecting strong demand.

That store-growth number that you mentioned, 3,000 now in North America. They want 7,000--

DAVE BRIGGS: They want to double it.

SEANA SMITH: --in the future, more than double. So it doesn't seem like they see that demand tapering off any time soon.

JARED BLIKRE: They pack the house. There's a Chipotle a couple blocks from here. Of all the lunch options, they are the most crowded every single week.

SEANA SMITH: What's your order?

JARED BLIKRE: I love the steak burrito--

SEANA SMITH: OK.

JARED BLIKRE: --with the [INAUDIBLE]

DAVE BRIGGS: My burrito consumption is level. I don't have a burrito season. Do you guys?

SEANA SMITH: I don't have a burrito season, but now I'm excited to go. It makes sense.

JARED BLIKRE: [INAUDIBLE]

SEANA SMITH: Yeah. You're always happier when springtime rolls around. So they are gearing up for that, that's for sure, and so are we.