Chipotle stock is approaching $ 2,000 per share, up 500% since 2018./Photo: Shutterstock
Chipotle Mexican Grill shares hit a new 52-week high on Thursday, hitting $ 1,958.44 per share before closing at $ 1,944, bringing the quick and laid-back Mexican chain closer to $ 2,000 per share.
The Newport Beach, Calif.-Based chain was among many restaurant companies whose stock prices more than recovered after a sharp sell-off on Monday. The vast majority of restaurants were up Thursday as broader stock indexes rose more than 1%.
The Dow Jones Industrial Average rose more than 500 points on Thursday, up 1.5%, and fully recouped its losses on Monday, as did the larger S&P 500 index.
Many restaurant stocks also recovered. The median stock price rose 2% on Thursday, with all but a half-dozen restaurant companies in positive territory.
Investors are investing a lot of money in casual dining, thanks in large part to a strong earnings report from Olive Garden owner Darden, whose stock hit a new 52-week high and closed higher by 6% on the day. This appeared to attract other casual dining companies, which held 10 of the 13 top-performing restaurant stocks on Thursday.
Comparatively, Chipotle’s close at just half a percent wasn’t in that territory, but the company owns by far the most expensive shares per share. The company’s shares are up 40% this year thanks in large part to a remarkably strong recovery, including 18% of two-year same-store sales in the second quarter, a result that brought its operating profits to the level restaurants at its highest level since 2015.
Chipotle’s performance just before and since the start of the pandemic has helped the company regain its status as a favorite Wall Street restaurant.
The company’s stock looked like it was going for $ 1,000 a share and more before a series of food safety issues detailed its sales and sent it down. The stock was trading in the $ 300 range when Brian Niccol was named CEO in 2018. Stocks have risen more than 500% since then.
Chipotle also has a business valuation multiple of 45 times earnings before interest, taxes, depreciation and amortization. By comparison, Domino’s valuation is 25x, Starbucks 22, McDonald’s 18, Wendy’s 16, and the valuation multiple of Yum Brands, owner of Taco Bell, is 20, according to data from financial services site Sentieo.