Chipotle slips after earnings miss

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Chipotle is down 1.91% at $415.23 a share after the company reported fourth quarter earnings on Thursday after the bell.

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Chipotle missed on revenue, and same-store sales dropped by 4.8% year-over-year.

Here are the key numbers from Q4, via the Bloomberg consensus:

  • EPS (adjusted): $0.55 ($0.50-$0.58 expected)
  • Revenue: $1.03 billion ($1.04 billion expected)
  • Same-store sales: -4.8% (-4.8% expected)

Chipotle has been struggling since the E. coli contamination scare started back in fall 2015.

The stock tumbled more than 50% and consumer perception of the brand fell to its lowest level since 2007, according to a survey by the YouGov Brand Index.

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But RBC Capital Markets analysts David Palmer and Eric Gonzalenz are still bullish on the fast casual restaurant chain.

The team believes Chipotle's ongoing sales declines, food safety improvement, and traffic initiatives will result in lower earnings this year, but see an opportunity in long-term growth.

In a follow up to their note published on Tuesday, they maintain a price target of $465.

The team are "optimistic that margins can begin to recover in 2017" and they see upside in accelerating sales momentum from operations improvements, digital ordering, and new marketing, "all of which can increase in impact in the coming months," according to the note.

The note also points to improving attitudes towards the brand, citing restaurant level economics as best-in-class.

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