Chipotle has history and recent performance to thank for Wall Street's rosy view of the fast-casual chain even with the potential for economic weakness.
One fast-casual restaurant chain has remained a favorite on Wall Street even as the U.S. grapples with a potential looming recession. Analysts see Chipotle Mexican Grill shares surging nearly 20% in the coming year. Over the past 15 months, the burrito chain has introduced three rounds of price increases that boosted the cost of its products 13% from a year earlier. The increases were due to higher costs for dairy, packaging, tortillas, avocados and wage increases in some areas.
The perception of value will be key if consumers feel the need to tighten their belts further. And they might. Bank executives on Friday said they are increasingly expecting a mild recession this year. Both JPMorgan's Jamie Dimon and Bank of America's Brian Moynihan are in this camp . Since they have insight into both consumer savings and credit card habits as well as corporate spending, they are in a good position to see trends coming.
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