Lining Up for Chipotle

October 29, 2009 at 4:00 AM UTC

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Some Wall Streeters may not be hot on Mexican food, but investors are ravenous for shares of Chipotle Mexican Grill (CMG). It operates 837 fast-casual restaurants in 33 states serving tacos, burritos, and salads made with fresh ingredients. McDonald's sold its 91% stake in Chipotle in 2006. Chipotle hit 80.17 on Oct. 28, up from 36 last Nov. 21. "We were encouraged by strong third-quarter results," says David Tarantino of investment firm Robert W. Baird (it has done banking for Chipotle), who rates it outperform.

Management projects flat sales for 2010, but Tarantino says this may "prove conservative." He urges investors to "buy into any weakness in the stock." His 12-month target for Chipotle is 115, based on improved restaurant traffic and cost-efficiency.