Restaurant stocks are relevant once again, and Chipotle Mexican Grill is proof. The stock is up nearly 13% and even touched on a new all-time high of USD 1,774 after the restaurant chain reported better-than-expected earnings. The results are evidence that consumers have once again returned to the dining scene, and from the looks of it, the entire sector is winning.

Even though Chipotle’s stock touched on a new record, that doesn’t mean that there is no more runway left for gains. One Wall Street bull who believes that Chipotle has more room to run is Cowen analyst Andrew Charles. He reportedly raised his price target from USD 1,850 to USD 2,080 on the stock.

The gains have spilled over into the broader restaurant sector, with the following stocks rallying today too:

  • The Cheesecake Factory is up 4%

  • Brinker International is up 4%

  • Red Robin Gourmet Burgers is up nearly 7%

Let the Good Times Roll

Chipotle beat Wall Street estimates on both the top and bottom lines, with revenue of USD 1.9 billion and EPS of USD 7.46. Same-store sales, which reflect restaurants that have been opened for a year or longer, soared more than 31%.

Investors want to know if the good times will continue, even in light of the Delta variant that threatens to throw a wrench into the easing of the lockdowns. Based on anecdotal evidence, the momentum will continue. Chipotle is forecasting “comparable restaurant sales growth in the low to mid-double digits range” for Q3.

The company also plans to open another 200 locations or so, which is a vote of confidence in the state of the consumer. Chipotle has added some menu items and also hiked prices to help offset higher costs.

Carrying a Torch

Chipotle is milking the spotlight for all its worth. The company has introduced “gold foil wrapped burritos” in honor of the Tokyo Olympics and the Americans who are competing in the games.

The gold-wrapped burrito will be tied to digital orders. The restaurant chain’s digital segment experienced a 10.5% jump in sales last quarter even as customers returned for the dine-in experience. Chipotle’s Olympics promotion begins on July 23. Chipotle also gave away up to USD 1 million in free burritos during the NBA Finals.

This article was originally posted on FX Empire