Here’s Why Effective Cost Management Should Be One Of The Key Targets Of Chipotle’s New CEO
Chipotle Mexican Grill (NYSE: CMG) recently announced that it had appointed Brian Niccol as its new Chief Executive Officer (CEO) effective from March 5th 2018. Niccol comes from Yum! Brands where he was the CEO of Taco Bell. He was instrumental in implementing a successful turnaround of this business.
Chipotle, which is struggling to win customer confidence, is banking heavily on its new CEO to turn its business around. Niccol comes with strong expertise in digital technologies, restaurant operations, and brand building and these skills are crucial for Chipotle’s turnaround. While the new CEO will focus on driving revenues through innovation and digital communications, a strong focus on maintaining the company’s margins is likely to improve Chipotle’s valuation significantly.
Our interactive model analyzes the impact of steady margins on Chipotle’s valuation:
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Chipotle has benefited significantly from the new U.S. tax laws and if the company is able to manage its expenses in line with the previous year, there can be a significant upside to our price estimate for the company.
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