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Analysts believe a slowing transaction growth trajectory at CMG as 2024 progresses may jeopardize its current valuation.
“While we view a consumer more focused on check management as a threat, we also point to the ongoing Carne Asada LTO vs. last year’s relatively lackluster Garlic Guajillo LTO as a driver of near-term transaction growth outperformance,” analysts wrote.
“We are incrementally cautious as the timing of Carne Asada’s end largely coincides with CA’s price increases,” they added.
Wedbush believes a premium is justifiable given the current annual EPS growth algorithm of 20%+ compared to its pre-COVID 10-year EPS growth CAGR of 13.5%.
