Chipotle Chorizo 6
  • Chipotle is expected to announce third-quarter earnings on October 25 and Wall Street is expecting fiscal-year 2019 earnings to be $11 a share.
  • The Wall Street consensus is “too optimistic” and “difficult to achieve,” Oppenheimer analyst Brian Bittner said.
  • To gain price power, the company needs lower cost of labor and goods, which is “unlikely” by Bittner’s calculation.

Wall Street is too optimistic on Chipotle, Oppenheimer said Monday, suggesting the fast-casual burrito chain will miss expectations for the coming earnings.

According to Oppenheimer, Wall Street expects Chipotle to earn $11 per share for fiscal-year 2019, and $15 per share for fiscal-year 2020. The most bullish analysts on the Street are saying earnings per share could even grow to $20 per share in 2020. But Oppenheimer analyst Brian Bittner argues the rest of Wall Street is “too optimistic” and that those numbers are “difficult to achieve.”

“We respect management’s marketing, digital and new- product strategies, but don’t view them as transformative enough (all elements considered) to boost Average Unit Volumes to levels needed for margin upside, earnings revisions…