Jim Cramer Says Chipotle Stock Will Break Out: “This One Is Ready”

0
43

Business News

CNBC’s Jim Cramer said Wednesday that he is bullish on Chipotle and predicts the stock is about to break higher.

“This one is ready. Chipotle has already recovered strongly from its lows, but after five months in which it was mainly traded sideways, it is a spiral spring,” said the moderator of “Mad Money”.

The fast-casual restaurant chain’s shares last closed at $ 1,550.34 and are up more than 18% in the past six weeks to end the first half of 2021 within reach of highs.

The stock lost momentum after a big run last year, but Cramer predicts it will pick up speed again in the second half of 2021.

“If the stock can go up another 20 or 30 points from here, I’ll bet that will cause a massive breakout and people will ‘buy, buy, buy’ Chipotle stock,” said Cramer. “I bet CEO Brian Niccol has no problem beating Street predictions. He’s just that good.”

Analysts expect Chipotle could make $ 24 per share this year, more than double the $ 10.73 per share in 2020, according to Factset data. At the close of trading on Wednesday, the stock was quoted at a price-earnings multiple of 63.

Cramer dismissed what he considered to be a high stock valuation, speculating that the company will continue its habit of outperforming current expectations, which makes the stock more attractive at current levels.

“The stock is far from cheap … Chipotle has a habit of looking a lot cheaper in hindsight because estimates keep rising,” Cramer said.

“The company keeps coming up with great numbers, and I think concerns about food price inflation and labor costs – those are the reasons for the stock – are anchored in it now at this point,” he said.

Source Link

Leave a Reply