chipotle mexican grill
DESCRIPTION
Chipotle Mexican Grill. Company Analysis James Gaffigan Zachary Hylton Jordan Schwartz Nicholas Pycha. Founded:1993, Colorado Industry: fast casual food 1,300 restaurants globally Restaurant chains in: 35 states in U.S District of Columbia Ontario, Canada Europe . Overview. - PowerPoint PPT PresentationTRANSCRIPT
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Chipotle Mexican GrillCompany Analysis
James GaffiganZachary Hylton
Jordan SchwartzNicholas Pycha
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OverviewFounded:1993, ColoradoIndustry: fast casual food1,300 restaurants globallyRestaurant chains in:
◦35 states in U.S◦District of Columbia◦Ontario, Canada◦Europe
(Zack's, 2012)
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OverviewServes:
◦Burritos and burrito bowls◦Tacos◦Salads
Food with Integrity Policy◦Fresh Ingredients◦local produce ◦Naturally raised animals
(Zack's, 2012)
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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)
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Jordan Schwartz
SWOT Analysis◦Chipotle vs. Taco Bell
Sustainable resources◦Food with Integrity vs. Cantina Bell
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SWOT AnalysisStrengths
◦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)
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SWOT AnalysisOpportunities
◦Focus on expansionThreats
◦Fierce competition ◦Increasing costs
(EBSCO, 2012)
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James Gaffigan
Competitive factorsBusiness in the news
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Competitive FactorsCurrent and potential earningsMergers and acquisitionsAny development of a new productNews
(How the Market Works, 2012)
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Business in the NewsRounding price of foodLegal issuesFinancial prospects disclosed incorrectlySubstantial drop in stock price
(Torrisi, 2012) (Olsen, 2012)
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Zachary Hylton
Financial Analysis◦Significant factors
Gross Profit Net Income P/E Ratio Earnings Per Share
(Zack's, 2012)
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Gross Profit
Gross Profit (in millions)
0 2,000 4,000 6,000 8,000
QdobaTaco BellChipotle
(Zack's, 2012)
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Net Income
Net Income (in millions)
020
040
060
080
01,0
001,2
001,4
00
QdobaTaco BellChipotle
(Zack's, 2012)
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(zacks.com)
P/E Ratio
FY Estimates
0 5 10 15 20 25 30 35
QdobaTaco BellChipotle
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Earnings per Share
Diluted EPS
0 1 2 3 4 5 6 7 8
QdobaTaco BellChipotle
(Zack's, 2012)
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Stock Prices
Sept '08 Sept '09 Sept '10 Sept '11 Sept '120
50100150200250300350400
ChipotleTaco BellQdoba
(yahoo.finance.com)
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DividendsCompany Yield Annual Div. Payout RatioChipotle -0- -0- -0-Yum Brands 1.93% $1.34 .36
(zacks.com)
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Nick Pycha
Analyst's Evaluations ◦Standard and Poor’s◦Zacks Investment
Conclusion: Our recommendation
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Standard & Poor’sCurrent recommendation: HoldRisk assessment: Medium riskValues CMG stock price at $278.20 per
share◦Overvalued by $58.20 or 17.3%
(Standard & Poor’s, 2012)
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Zacks Investment ResearchZacks Rank: 3- Hold
Recommendation: Neutral
Failed to meet estimations◦Earnings per share◦Revenue
(Zack's, 2012)
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Conclusions
Fierce competitionOvervalued stock price/ lack of dividendsCurrent legal issuesRecommendation: YUM Brands