Morningstar Rating

Stock Research and Analysis

by R.J. Hottovy, CFA

Bulls Say

We expect the fast-casual restaurant category to outpace the broader restaurant industry over the next several years, driven by a compelling value proposition and attractive unit economics.
Chipotle is at the forefront of an industry movement toward naturally raised proteins, dairy products from pasture-raised cattle, and organic produce. Though more costly to source, these fresh ingredients are a key source of differentiation.
A push into secondary concepts, including ShopHouse and Pizzeria Locale, could add new engines of long-term growth potential. Read more 

Bears Say

Fast-casual restaurant competition is increasing, and switching costs are nonexistent. We estimate that Mexican concepts make up nearly one fourth of the $38 billion fast-casual industry in the U.S.
Many casual-dining chains are discounting to reverse stagnant traffic trends, which could present additional fast-casual competition.
Chipotle must contend with unpredictable consumer spending trends, wage increases, and commodity costs volatility. Because there are fewer suppliers of naturally raised beef, chicken, and pork, food shortages and unpredictable pricing are possible. Read more 


Chipotle features a seasoned management team with a great deal of restaurant industry experience. Chairman and co-CEO Steve Ells, who holds a degree from the Culinary Institute of America, founded Chipotle in 1993. President and co-CEO Montgomery Moran   Read more 


Chipotle Mexican Grill is the largest player in the $8 billion-plus domestic fast-casual Mexican restaurant category. Its menu includes burritos, bowls, tacos, and salads   Read more 

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