Mar. 20 at 9:40 AM
Mizuho Upgrades
$CMG to Outperform from Neutral, Raises PT to
$40 from
$37
Analyst comments: "We see a comp inflection near-term along with incremental margin visibility, with Q1 earnings and Q2-to-date commentary a potential positive catalyst.
One, based on the strength of our checks, we increase our Q1 same-store sales growth estimate to 0.0% from (0.4)% versus consensus of (1.1)%. Importantly, trends strengthened as the quarter progressed, pointing to Q2 traffic/comp upside as well (1.5% MSUSA; 0.7% consensus).
Two, early success of ongoing comp initiatives, including incremental value focus, increased marketing/promotional cadence, and incremental menu innovation, points to further comp acceleration as 2026 progresses, particularly with easier year-over-year compares ahead.
Three, CMG's year-long cycle of lower margin revisions is almost at an end.
Lastly, valuation is an overly pessimistic reflection of CMG's mid-teens long-term EBITDA growth algorithm.
