Chipotle Mexican Grill Stock Surges on Upgrade

Chipotle Mexican Grill (NYSE:CMG) stock was up today on an upgrade from Morgan Stanley.

Chipotle Mexican Grill Stock Surges on Upgrade

The upgrade to CMG stock takes it from a rating of “In Line” to its new rating of “Overweight.” At the same time, the research firm also updated its 12-month price target for the stock. This has the new price target sitting at $600. For comparison, Chipotle Mexican Grill stock was sitting at $493.32 when the markets closed on Tuesday.

Morgan Stanley says that there are a few reasons that it is taking such a bullish approach to Chipotle Mexican Grill stock. The first reason is that the company believes there is potential for strong earnings per share thanks to changes in management at the restaurant chain.

The next reason that Morgan Stanley gives for the upgrade to CMG stock has to do with “low hanging opportunities in marketing, product development and operational initiatives to drive sales.” Finally, it notes that the company is operating in a much more “benign competitive environment,” reports CNBC.

The change of leadership that Morgan Stanley mentions in its note is a switch of its CEO. Brian Niccol took over as the CEO of Chipotle Mexican Grill earlier this year. Niccol is the previous CEO of Yum Brands’ (NYSE:YUM) Taco Bell. There has been hope among CMG investors that he can turn the company around the same way he did with Taco Bell.

CMG stock was up 5% as of Wednesday afternoon and is up 68% year-to-date.

As of this writing, William White did not hold a position in any of the aforementioned securities.

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