Chipotle shares up 5.4% in Friday premarket trading

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Chipotle’s pickup shelves will give the second half a boost, analysts say

Chipotle Mexican Grill Inc. highly-anticipated business update fell flat for many analysts because it lacked details, but SunTrust Robinson Humphrey thinks what was presented will give the second half of 2018 a bump. Things like the addition of pickup shelves, menu innovation and a new marketing campaign “will be the beginning of “a multi-year same-store sales recovery,” wrote analysts led by Jake Bartlett. On the call, Chipotle’s Chief Executive Brian Niccol said the addition of a window with a sign designating it for digital order pickups in Denver “caused a double-digit increase in our digital sales within the first few weeks, and it sustained.” While adding windows to all restaurants would take too long, Niccol said self-serve shelves would do the trick and be more cost-effective. “We expect the addition of pickup shelves and delivery ordering capabilities on the app, as well as related marketing to boost digital sales from 8.8% in 1Q18 to double digits by 4Q18,” wrote SunTrust. Analysts rate Chipotle shares buy and raised their price target to $490 from $410. Chipotle shares sank 6.3% in Thursday trading, but are up 48.2% for the year to date. The S&P 500 index is up 1.6% for 2018 so far.

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