By Chibuike Oguh
NEW YORK (Reuters) - Shares of Chipotle Mexican Grill Inc (NYSE:CMG) soared to a record high on Wednesday after the burrito chain beat analysts' estimates for first-quarter profit and sales.
Chipotle said its revenue rose 17% year-on-year to $2.4 billion, driven by higher restaurant sales, 41 new store openings, and increased demand from lower-income customers. Net income rose to $291.6 million, up 84% from the previous year, helped by lower avocado prices and lower delivery expenses.
Analysts' average forecast of Chipotle's revenue and net income were $2.33 billion and $248.4 million, according to Refinitiv data.
Chipotle's shares rose 14% to $2,030 in afternoon trading.
Its stock has had a spectacular run since Brian Niccol was named chief executive in February 2018 just as the burrito chain was grappling with a wave of food poisoning outbreaks that crushed sales.
(Graphic: Chipotle stock price - https://fingfx.thomsonreuters.com/gfx/buzz/mypmoxxyapr/CMG%20stock%20chart.png)
"We'd been a bit tactically cautious on Chipotle Mexican Grill shares post fourth quarter, albeit favorably inclined toward the longer-term growth story at the right price," Morgan Stanley (NYSE:MS) analysts wrote in a note to investors.
"Recent performance sidelines the near-term bear concerns, which had focused on traffic or price sensitivity and margin upside versus current expectations."
More than a dozen Wall Street analysts hiked their price targets on the stock in reaction to the company's report. The average rating on Chipotle among the 34 analysts covering the company is "buy" with a median price target of $2,050.00, up about 12% from a month ago, according to Refinitiv data.