Investment Thesis for Chipotle Mexican Grill, Inc. (NYSE:CMG)
Embargo until
Date
2017-02
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Institute for Applied Economics, Global Health, and the Study of Business Enterprise
Abstract
This working paper is an in-depth analysis of Chipotle Mexican Grill Inc. The analysis examines the economic factors that impact Chipotle’s underlying business fundamentals. This analysis is then combined with a proprietary Discounted Cash Flow (P-DCF) model to determine Chipotle’s financial position. The model will be presented along-side Monte-Carlo simulations to reveal the distribution of probable free cash flows and the potential for future earnings. In addition to these quantitative factors, we I assess the alignment of Chipotle’s executives with shareholders based on the company’s proxy report. At the conclusion of this analysis, I aim to clearly convey Chipotle’s business strategy and the company’s financial standing to arrive at a sound investment decision.
Description
The Studies in Applied Finance series is under the general direction of Prof. Steve H. Hanke, Co-Director of the Johns Hopkins Institute for Applied Economics, Global Health, and Study of Business Enterprise (hanke@jhu.edu) and Dr. Hesam Motlagh (hesamnmotlagh@gmail.com), a Fellow at the Johns Hopkins Institute for Applied Economics, Global Health, and Study of Business Enterprise.
This working paper is one in a series on applied financial economics, which focuses on company valuations. The authors are mainly students at the Johns Hopkins University in Baltimore who have conducted their work at the Institute as undergraduate researchers.
Keywords
finance, investment thesis, Chipotle Mexican Grill, financial modeling, discounted cash flow, free cash flow, Monte-Carlo simulation, management compensation