Chipotle Overvalued Despite Brand Strength

2 months ago

"Now, for the 4P trading at 26 times forward earnings that was a company I used to trade at 65 70 times. It was at 35 times two weeks ago. Now trading at 26 times forward earnings and I still believe it's overvalued. I would compare Chipotle to other, you say, companies even Darden Restaurants. For such a business model, I would really not pay much more than 20 times earnings. I think anything above 20 in general is too expensive for a business model like Chipotle."

The speaker critiques Chipotle's current valuation, noting that even though the stock has come down from extremely high multiples, it remains overvalued at 26 times forward earnings. He emphasizes that for Chipotle's business model, a multiple above 20 times earnings is too expensive, comparing it unfavorably to peers like Darden Restaurants.

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