The pullback in Chipotle (CMG) is overdone.
After dropping on news its CEO left to join Starbucks, the stock has become oversold. Plus, as noted by Bernstein analysts, the CEO departure has created a buying opportunity.
“We believe [Brian] Niccol’s departure will create short-term volatility in the stock. … Yet Chipotle’s fundamentals are unchanged,” said the firm, as quoted by CNBC.
“Net-net, while this news was a negative surprise for CMG investors, we do not think it materially alters the fundamental strength and LT course of the company, and this stock price reaction presents an attractive entry point for LT investors,” they added.
Bernstein now has a price target of $70 on the CMG stock