Author Topic: CMG - Chipotle  (Read 122607 times)

aceskc

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Re: CMG - Chipotle
« Reply #350 on: February 13, 2018, 08:31:38 PM »
$100 turnaround valuation seems harsh...CMG reported ~6 in reported earnings...adjusting for growth capex (~143M) and card breach one time payment (30M) , you get an after tax net earnings of an additional ~4.. So we have ~10 adj. eps, ~4.5B revenue that grew 15%, ~18 net cash per share, ~3.3% share buyback.  Bias Disclaimer: Im a buyer here.

In addtion,  'Breakfast daypart' also might be the hidden ace up his sleeve, which could catalyze SSS , even absent any successful menu innovation initiatives.
"Under his leadership, he successfully repositioned Taco Bell as a lifestyle brand and successfully launched numerous product initiatives, including the new breakfast daypart, the fastest growing daypart in the industry. He transformed Taco Bell into a social media leader and revolutionized its digital approach through mobile ordering and payment across their 7,000 restaurants. He also created a people-centric innovation culture that has been recognized throughout the industry."



johnny

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Re: CMG - Chipotle
« Reply #351 on: February 13, 2018, 08:49:21 PM »
They've been working (intermittently) on breakfast for years, and developed nothing. Might be a bit gun-jumpy to assume he's coming to the table with a brilliant plan there. The taco bell breakfast offering is unbelievable trash, and works just fine for the sort of people who have made peace with their lives as taco-bell customers, but if Chipotle plans on selling breakfast burritos at $10 per transaction, they're going to need something that I doubt he has any unique ability to provide.

Honestly, this seems like a potential branding catastrophe. Let's hope that everybody is aware of that, and their willingness to run that risk speaks to their confidence in his actual abilities.

TorontoRaptorsFan

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Re: CMG - Chipotle
« Reply #352 on: February 13, 2018, 09:39:50 PM »
This is great news!
I thought Chipotle needed some new and innovative ideas and this hiring proves it.
This turnaround will take time but iím Confident in the new CEO.
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mwtorock

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Re: CMG - Chipotle
« Reply #353 on: February 14, 2018, 08:08:11 AM »
Have not looked into the new CEO yet. Just a quick glance at this morning's newspaper. Could you share a bit more about why you're so confident in him?

The first thing came to my mind was the JCP drama that involved a new CEO and Pershing Square. Not saying this time it would be the same, but would like to know more about his strategies or plans for the turnaround.

CorpRaider

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Re: CMG - Chipotle
« Reply #354 on: February 14, 2018, 10:00:02 AM »
$100 turnaround valuation seems harsh...CMG reported ~6 in reported earnings...adjusting for growth capex (~143M) and card breach one time payment (30M) , you get an after tax net earnings of an additional ~4.. So we have ~10 adj. eps, ~4.5B revenue that grew 15%, ~18 net cash per share, ~3.3% share buyback.  Bias Disclaimer: Im a buyer here.

In addtion,  'Breakfast daypart' also might be the hidden ace up his sleeve, which could catalyze SSS , even absent any successful menu innovation initiatives.
"Under his leadership, he successfully repositioned Taco Bell as a lifestyle brand and successfully launched numerous product initiatives, including the new breakfast daypart, the fastest growing daypart in the industry. He transformed Taco Bell into a social media leader and revolutionized its digital approach through mobile ordering and payment across their 7,000 restaurants. He also created a people-centric innovation culture that has been recognized throughout the industry."

Yo quiero 10x EV/EBIT.

Spekulatius

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Re: CMG - Chipotle
« Reply #355 on: February 14, 2018, 06:56:33 PM »
$100 turnaround valuation seems harsh...CMG reported ~6 in reported earnings...adjusting for growth capex (~143M) and card breach one time payment (30M) , you get an after tax net earnings of an additional ~4.. So we have ~10 adj. eps, ~4.5B revenue that grew 15%, ~18 net cash per share, ~3.3% share buyback.  Bias Disclaimer: Im a buyer here.

In addtion,  'Breakfast daypart' also might be the hidden ace up his sleeve, which could catalyze SSS , even absent any successful menu innovation initiatives.
"Under his leadership, he successfully repositioned Taco Bell as a lifestyle brand and successfully launched numerous product initiatives, including the new breakfast daypart, the fastest growing daypart in the industry. He transformed Taco Bell into a social media leader and revolutionized its digital approach through mobile ordering and payment across their 7,000 restaurants. He also created a people-centric innovation culture that has been recognized throughout the industry."

Yo quiero 10x EV/EBIT.

I agree that $100/ share is harsh, but turnarounds are hard to do. donfar, the growth caped they are spending hasnít done much, so bear case (beer case?) may be thatís its money down the drain. $6 in earnings for a $100 share isnít thwt cheap optically. I have seen stranger things in life than a turnaround at 16x earnings.
To be a realist, one has to believe in miracles.

TorontoRaptorsFan

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Re: CMG - Chipotle
« Reply #356 on: March 01, 2018, 11:19:27 AM »
Thank goodness! Chipotle is shutting down it's Tasty Made concept.
Ideally when their stock recovers they should purchase a burger chain.
I would like them to expand Pizzeria Locale. 

https://www.eater.com/2018/3/1/17066484/chipotle-tasty-made-closed


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DCG

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Re: CMG - Chipotle
« Reply #357 on: March 01, 2018, 11:28:02 AM »
They've been working (intermittently) on breakfast for years, and developed nothing. Might be a bit gun-jumpy to assume he's coming to the table with a brilliant plan there. The taco bell breakfast offering is unbelievable trash, and works just fine for the sort of people who have made peace with their lives as taco-bell customers, but if Chipotle plans on selling breakfast burritos at $10 per transaction, they're going to need something that I doubt he has any unique ability to provide.


It seems like for breakfast burritos, you make scrambled eggs and bacon. The rest of the toppings are the same as they already have. Maybe add potatoes. $10 would be a tough selling point though.
« Last Edit: March 01, 2018, 11:30:42 AM by DCG »

DooDiligence

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Re: CMG - Chipotle
« Reply #358 on: March 01, 2018, 06:05:54 PM »
They've been working (intermittently) on breakfast for years, and developed nothing. Might be a bit gun-jumpy to assume he's coming to the table with a brilliant plan there. The taco bell breakfast offering is unbelievable trash, and works just fine for the sort of people who have made peace with their lives as taco-bell customers, but if Chipotle plans on selling breakfast burritos at $10 per transaction, they're going to need something that I doubt he has any unique ability to provide.


It seems like for breakfast burritos, you make scrambled eggs and bacon. The rest of the toppings are the same as they already have. Maybe add potatoes. $10 would be a tough selling point though.

A sausage, egg, and cheese Taquito at Whataburger costs around $2.50 (and they're really good.)
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DTEJD1997

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Re: CMG - Chipotle
« Reply #359 on: March 01, 2018, 07:10:37 PM »
They've been working (intermittently) on breakfast for years, and developed nothing. Might be a bit gun-jumpy to assume he's coming to the table with a brilliant plan there. The taco bell breakfast offering is unbelievable trash, and works just fine for the sort of people who have made peace with their lives as taco-bell customers, but if Chipotle plans on selling breakfast burritos at $10 per transaction, they're going to need something that I doubt he has any unique ability to provide.
It seems like for breakfast burritos, you make scrambled eggs and bacon. The rest of the toppings are the same as they already have. Maybe add potatoes. $10 would be a tough selling point though.

I would think $10 would be an impossible price point...

When I lived in Houston...there was a Mexican bakery.  Of course they would bake bread, donuts, churros, pastries & such...but their specialty was breakfast tacos.  They would open about 4 AM & workers going into the refineries would eat there before their shift started.  They also did a tremendous business with salesmen/contractors would buy a "tray" of tacos and take them to the plant(s).  EVERYBODY loved to see a sales guy with a tray of breakfast tacos (20?).

Of course, locals would also eat there.  MANY people of Mexican and Central/South American descent would eat there...but TONS of Anglos too.  Everybody liked their tacos.

I think their secret ingredient was lard...but the eggs tasted out of this world.

They had maybe 20-30 different things you could put in the tacos.

Of course, the tortillas were hand made on the premises.  EVERYTHING was fresh.  They must have had 12-15 workers in the morning preparing these things.  It was a multi-million dollar operation.

They had TWO different kinds of scrambled eggs, Mexican & American, you could get refried beans, rice, bacon, beef, chorizio, grilled vegetables, onion, tomatoes, cheese, potatoes (marinated in a hot spice?)., Pico de Gallo that was simply one of the best I've ever had.

Two tacos were MORE than enough for a meal...If you ate three, you would probably be skipping lunch.

C&D bakery was (is) a family run operation.  I checked on the interweb, and it appears that they had a fire in Jan. 2018 and have relocated to a new location.

These guys had an interesting and incredible business model.  I've always though that would be an interesting niche.  Once you have a well done breakfast taco...you don't go back to eating a taco bell, that is for sure!

So if Chipotle can do it RIGHT, I think they may be on to something...of course, execution is key.