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After an impressive 325.2% rally over the last five years, Chipotle Mexican Grill (CMG) hit a speed bump in 2024 when CEO Brian Niccol made a surprise exit in August to struggling coffee chain Starbucks (SBUX). Niccol was the driving force behind Chipotle’s remarkable turnaround story following its foodborne illness crises, implementing key technological innovations to enhance worker efficiency and supply chain operations. Naturally, his exit was a tough pill for investors to swallow.
Fast forward to 2025, and Chipotle stock is still struggling to regain momentum. Yet, the company’s popularity among customers remains strong, and it isn’t slowing down on innovation either. From an artificial intelligence (AI)-powered hiring platform to an avocado-cutting robot and faster cooking technology, the company is pushing forward. And now, with Morgan Stanley analysts rolling out some fresh projections for the company, should investors buy, sell, or hold CMG stock in 2025?
About Chipotle Stock
Known for its burritos, bowls, tacos, and salads, California-based Chipotle Mexican Grill, Inc. (CMG) focuses on serving responsibly sourced, real food made with wholesome ingredients and without artificial additives. As of Dec. 31, 2024, the company operates over 3,700 restaurants across the U.S., Canada, Europe, and the Middle East, making it the only restaurant of its size to own and operate all its locations in North America and Europe.
The company’s market cap presently stands at roughly $72.6 billion. However, despite its strong market presence and brand loyalty, the burrito chain’s shares have been in some hot water. Over the past year, CMG stock has slipped 0.6%, while the broader S&P 500 Index ($SPX) surged 13.5% during the same stretch. The slide has continued into 2025, with CMG down nearly 11% on a YTD basis.
Chipotle’s stock isn’t exactly a bargain at 42.26 times forward earnings, towering over the sector median of 15.78x. But when measured against its own five-year average of 64.75x, the current valuation looks far more reasonable. And for investors, this could be a rare chance to grab shares at a relative discount.
Chipotle’s Mixed Q4 Earnings
Chipotle stock took a 2.6% hit in the session after its fourth-quarter earnings results on Feb. 4. The company reported $2.8 billion in total revenue, marking a 13.1% year-over-year increase, in line with Wall Street’s expectations. Same-store sales also climbed 5.4% annually, showcasing continued demand.
Yet the enthusiasm faded when CFO Adam Rymer warned that sales have been "volatile" in early 2025. On the Q4 earnings call, executives pointed to weather-related disruptions, including wildfires in Los Angeles, as a bigger factor affecting traffic than in previous years. On a brighter note, Chipotle delivered an earnings beat, with adjusted EPS climbing 19% year over year to $0.25, narrowly surpassing Wall Street’s expectations.
The company also ramped up its expansion efforts, opening 119 new company-owned restaurants in Q4, 95 of which featured a Chipotlane for digital orders, along with one internationally licensed location. Looking ahead to fiscal 2025, management expects comparable restaurant sales to rise in the low to mid-single digits and plans to open 315 to 345 new company-owned locations, with over 80% featuring a Chipotlane.
Analysts tracking Chipotle Mexican Grill project the company’s bottom line to soar 15.2% year over year to $1.29 per share in fiscal 2025 and grow another 18.6% to $1.53 per share in fiscal 2026.
What Do Analysts Expect for Chipotle Stock?
Despite a lukewarm reaction to its latest earnings report, Chipotle edged higher on March 3 after Morgan Stanley backed the stock with a bullish outlook. The leading investment bank acknowledged some choppy demand trends but saw no fundamental issues derailing the long-term growth story.
Analyst Brian Harbour pointed to Chipotle’s strong brand, strategic automation push, and steady unit expansion as key drivers for success in 2025 and beyond. Plus, with international growth in the mix and a rock-solid balance sheet, Morgan Stanley upgraded CMG to “Overweight” from “Neutral,” setting a $70 price target.
Overall, Wall Street appears optimistic about CMG stock, with a consensus “Moderate Buy” rating. Of the 31 analysts offering recommendations, 20 back it with “Strong Buy,” three give a “Moderate Buy,” and eight maintain a “Hold.”
The average analyst price target of $66.58 indicates about 25% potential upside from the current price levels, while the Street-high price target of $75 suggests that CMG could rally as much as 40.7% from here.
