With Chipotle’s (CMG – Free Report) new CEO Brian Niccol at the helm, the first quarter could mark the start of a better era for the embattled fast-casual chain. But before investors get too caught up in what Niccol might change long-term, they should look at what to expect from Chipotle’s upcoming first quarter financial results.
Chipotle’s new chief executive and the former head of Yum Brands’ (YUM – Free Report) Taco Bell didn’t officially take over until early March. This means that any business innovations Niccol might have already implemented won’t have much impact on Chipotle’s Q1 earnings results.
Furthermore, amid this volatile market, investors should focus on finding stocks that are expected to post strong earnings results and avoid ones that aren’t.
With that said, let’s take a look at what to expect from Chipotle as we inch closer to its first-quarter earnings report.
Outlook & Valuation
Chipotle’s Q1 revenues are projected to climb by 7.4% to reach $1.15 billion, based on our current Zacks Consensus Estimates. Meanwhile, the restaurant chain is expected to report quarterly earnings of $1.53 per share, which would mark a 4.4% decline from the year-ago period.
Investors should also note that Chipotle has earned four earnings estimate revisions, with 100% agreement to the downside, all within the last 60 days. However, the company’s Most Accurate Estimate is $1.55 per share. This means that estimates have come in higher as we get closer to Chipotle’s Q1 earnings.
Chipotle is currently trading with a Forward P/E of 36.1, which marks a substantial premium to the “Retail – Restaurants” industry’s average of 22.4.
Price Performance and Surprise History
Another important factor that investors might want to consider ahead of Chipotle’s Q1 earnings report is the company’s history of earnings surprises and the effect that these surprises have had on share prices.