Chipotle to Get a Lift From Ample Avocado Supply, SunTrust Says
- Amount of avocados seen increasing 16% Y/y in second quarter
- Shares have surged more than 120% from mid-March lows
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Chipotle Mexican Grill Inc.’s margins are set to benefit from a resurgent avocado supply that will keep prices lower at least through the summer, SunTrust analyst Jake Bartlett wrote in a report.
The latest avocado shipment projections from the Hass Avocado Board suggest a favorable year for the fruit, which is the key ingredient in Chipotle’s guacamole. The supply of avocados is expected to increase 16% year-over-over in the second quarter of 2020 and 21% in the third quarter through August 30, fueled primarily by higher supply from California, Bartlett said.