Are Three Companies Waiting in the Wings to Replace Chipotle?

August 1, 2012 7:05 PM EDT | By Anthony Smith
Chipotle
Chipotle (Photo: Creative Commons)

Ah, Chipotle. Your burritos keep growing on us, even as your stocks plummet. But don't worry, fajita peddlers: it's not like your company is in failure of going under anytime soon. In fact, your huge and recent dips are just reactions to typical stock market skittishness. In other words, when analysts predicted that Chipotle's revenue was going to increase to $706 million, but Chipotle fell short at $691 million, as well as single-digit same-store-sales growth, investors became super nervous about the potential for future growth. The huge recent dips at or about 26% in stock price reflect as much.

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In other words, Chipotle is no longer the horse that everyone's betting on, but that doesn't mean that it won't cross the proverbial finish line. But if you're looking for a new stock market food darling, analysts have a few recommendations:

1. Panera Bread

Panera Bread surpassed analyst expectations with its Q2 recent earnings release. Now, since expectations are really everything as Chipotle's stock has demonstrated, shares in the restaurant are up by a margin of ten percent. If the company continues at this rate, they can expect to move those gains at a compelling momentum throughout the rest of the year. It wouldn't be out of the picture to forecast a 26% to 27% increase in full-year earnings per share of stock.

Add that to the fact that Panera's product is good, in spite of world that's getting more and more skittish when it comes to gluten, and the potential for this company really speaks for itself.

2. McDonald's

McDonald's was Chipotle's early provider, and people are once again looking to it for its ability to diversify its offerings. In other words, analysts are suggesting a burrito ceiling which Chipotle will have to find a dynamic means of overcoming. Though Southeast Asian cuisine has been suggested, that idea has failed to move outside of one D.C. Location.

But in spite of falling just a little short, McDonald's recent small revenue increases could come from their new coffee shops, which get new customers in their stores and increase the store's staying power with its existing customers.

3. Starbucks

Starbucks is about to launch a line of home-brewing machines to rival its competition in Green Mountain Coffee Roasters. On top of that, analysts are crediting the company's bakery purchase as an excellent means of diversifying its offerings. That, coupled with the move into the homes of its customers, forecasts strong short-term growth for the coffee kings.



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