Wall Street Can’t Stop Arguing if Chipotle is a "BUY" or “SELL” After Starbucks Stole Their CEO

With Chipotle's CEO, Brian Niccol, heading to Starbucks as one of the highest-paid CEOs, even my wife asked, “Does this mean Chipotle’s going to suck now?” 

And she’s not alone, stock’s 7.5% drop on Tuesday had investors worried. But before you sell, some Wall Street analysts think this dip could be a good opportunity to buy. So, what’s the real deal? Is it time to buy the dip, or is Chipotle in trouble?

Brian Niccol is no ordinary CEO. Some folks are calling him the LeBron James, Tom Brady, and Messi of the fast-food world, all rolled into one. But Niccol’s career didn’t start this way; he worked his way up through the fast-food ranks with the kind of grit you’d expect from someone who once had to defend Taco Bell’s “seasoned beef” in court. Yes, those dog food allegations are never going away.

(Source: Forbes)

Back then, Niccol was known for being the guy who wasn’t afraid to take risks—like rolling out the now-iconic Doritos Locos Tacos or embracing Snapchat way before your grandma started using it. He was all about making fast food cool again, something he pulled off with flying colors when he eventually became Taco Bell’s CEO. He took a brand that was becoming a punchline and repositioned it as a youthful, edgy favorite. The “Live Más” slogan? Yeah, that was Niccol’s idea. By the time he left in 2018, Taco Bell was the favorite child of Yum Brands, outperforming Pizza Hut and KFC.

When Niccol joined Chipotle, the brand was reeling from food safety scandals and salmonella drama. But he quickly turned it into a powerhouse with drive-throughs, a revamped menu, and a hit loyalty program, driving the stock up 800%. So, when Starbucks backed the dump truck full of money to Niccol, Chipotle’s stock predictably dropped, while Starbucks’ shares shot up 24%, as investors cheered their new CEO.

But here’s the thing, despite the stock’s plunge, some analysts are saying this might be the perfect time to buy. Wedbush’s Nick Setyan just upgraded Chipotle to “Outperform,” raising his price target to $58. His reasoning? Chipotle’s fundamentals are still as solid as a chicken burrito bowl at lunchtime. The company’s same-store sales are up 11.1%, revenue is beating expectations, and digital ordering is still on fire. Basically, the salsa’s still hot, even if Niccol’s left the kitchen.

Deutsche Bank’s Lauren Silberman is also keeping her buy rating, with a price target of $67. She’s confident in the talent that remains at Chipotle—Scott Boatwright is stepping in as interim CEO, and let’s not forget Jack Hartung, who’s agreed to stick around and keep the burrito train running smoothly. Silberman’s take? Chipotle’s still got plenty of steam, and the recent dip is just a blip on the radar.

But not everyone’s sipping the Chipotle Kool-Aid. Analysts from Evercore ISI and Baird are a bit more cautious, lowering their price targets to $59 and $62, respectively. They acknowledge that losing a star player like Niccol could hurt in the short term, but they’re not ready to abandon the healthy fast food chain just yet.

The takeaway? If you’re adventurous, this dip might be a chance to buy Chipotle stock at a discount. The company still has a solid strategy, and Niccol’s departure isn’t the end of the road. But if you’re cautious, it might be wise to wait and see if this new leadership is competent.

Stock.News has positions in Starbucks.