- Price
- $30.79
- Fair value
- $36.00
- Discount
- 14.5%
- Uncertainty
- Medium
- LSEG rating
- 2.11
- Moat
- Wide
- Next earnings
- 2026-10-28
- Next earnings is estimate
- No
- Company name
- Chipotle
- Sector
- Restaurants
- About
- Chipotle Mexican Grill runs fast-casual restaurants that sell burritos, bowls, quesadillas, tacos and salads. At June 30, 2026, it owned 4,186 restaurants, of which 4,074 were in the United States and 112 in other countries, and partners ran 15 more restaurants abroad. Chipotle owns and runs almost all of its restaurants, so it earns money from food sales and keeps the restaurant profit, unlike franchise companies. Digital orders gave 38.3% of food and beverage revenue in Q2 2026. Most new restaurants have a Chipotlane, a drive-through lane for digital orders. It plans 350 to 370 new restaurants in 2026, and it has no debt. Scott Boatwright is the CEO.
- Thesis
- The market prices Chipotle with a discount because fewer customers visited its restaurants in 2025 and growth stays slow in 2026, while costs rise. Comparable restaurant sales grew only 0.5% in Q1 2026 and 2.2% in Q2 2026. The restaurant-level margin fell to 25.2% in Q2 2026 from 27.4% a year earlier, because of beef and freight inflation and more labor in the restaurants. Food safety adds a second fear. Chipotle guided Q3 2026 comparable sales growth of about 1%, with a cut of about 2 points from a cyclospora outbreak, and on August 4, 2026 it removed jalapeños linked to a salmonella outbreak, which its guidance did not include. For the gap to close, three things must be true. Transactions must keep growing, as they did in Q1 and Q2 2026. The restaurant-level margin must stop falling as menu prices and lower avocado costs offset beef inflation. No new food-safety event must hurt traffic. The first test is the Q3 2026 report on October 28, 2026, with an update on Q4 trends, and the 2027 outlook is expected in early February 2027. If traffic grows again, the gap can close over the next three to five quarters. The main risk is a weak consumer that keeps comparable sales near zero.
- Risks
- Food-safety events cut traffic. Chipotle expected a cut of about 2 points to Q3 2026 comparable sales from a cyclospora outbreak, and it removed jalapeños after a salmonella outbreak in August 2026.
Customers spend less. Comparable sales grew only 0.5% in Q1 2026 and 2.2% in Q2 2026. If the consumer stays weak, traffic can fall again, and Chipotle cannot raise prices much without losing more customers.
Costs rise faster than prices. In Q2 2026, food, beverage and packaging costs rose to 29.7% of revenue from 28.9%, mostly from beef and freight, and labor rose to 25.0% from 24.7%. The operating margin fell to 15.7% from 18.2%.
Chipotle owns almost all of its restaurants, so it carries all of their costs. It also spends much of its cash on buybacks: $1.33 billion in the first half of 2026, and its cash and investments fell to $775 million at June 30, 2026.
- Balance sheet
- Cash: $775M
Debt: $0.0M
Net cash: $775M
Undrawn credit line: $500M
Chipotle has no debt. Cash includes $228.2 million of cash and cash equivalents, $449.7 million of short-term investments and $97.1 million of long-term investments at June 30, 2026. Cash and investments fell from about $1.25 billion at December 31, 2025, mostly because Chipotle bought back $1.33 billion of stock in the first half of 2026. Operating cash flow was $1.33 billion in the same period. The figures exclude $5.42 billion of operating lease liabilities for its restaurants ($317.0 million current and $5.10 billion long-term). Chipotle had no borrowings under its $500 million revolving credit facility, and $1.68 billion of buyback authorization remained at June 30, 2026.
As of 2026-06-30.
- Checkpoints
- Oct 28, 2026: Q3 2026 results: comparable sales and Q4 trend. Pending. Watch: A pass is Q3 comparable sales at or above the guided 1% with positive transactions; a fail is negative transactions or a guidance cut because of the salmonella event.
Feb 2027 (estimate): 2027 outlook: traffic and margin. Pending. Watch: A pass is 2027 guidance for positive comparable sales and a stable restaurant-level margin; a fail is guidance for flat sales or a lower margin.
- Recent events
- 2026-10-12: Starbucks said that it is "not buying Chipotle". On October 8, the Financial Times reported that Starbucks had worked with advisers on a possible proposal to buy Chipotle, and Chipotle shares rose 6.2% that day. Chipotle did not comment, and its shares fell about 3% after the denial.
2026-09-14: Chipotle elected Sabir Sami, the former CEO of KFC, to its board of directors, which grew to 11 members.
2026-08-04: Chipotle removed jalapeños from its restaurants after health authorities in Minnesota began to investigate a salmonella outbreak. Chipotle said that the Minnesota Department of Health had no ongoing concerns with Chipotle, and that its 2026 guidance did not include a financial impact from the matter. The stock fell about 10% that day.
2026-07-29: Chipotle reported Q2 2026 results. Revenue was $3.3 billion, up 9.3%. Comparable restaurant sales grew 2.2%, with transactions up 1.0%. The restaurant-level margin fell to 25.2% from 27.4%, and adjusted EPS was flat at $0.33. Chipotle raised its full-year guidance to low single-digit comparable sales growth, bought back $630.7 million of stock in the quarter, and added $1.3 billion of buyback authorization.
2026-06-01: Fernando Machado, a former marketing chief of Restaurant Brands International, started as Chief Brand Officer. Chipotle announced him on April 27, 2026, together with Arlie Sisson as its first Chief Digital Officer.
2026-04-29: Chipotle reported Q1 2026 results. Revenue was $3.1 billion, up 7.4%. Comparable restaurant sales grew 0.5%, as transactions rose 0.6%. Adjusted EPS fell 17.2% to $0.24.