Chipotle Mexican Grill Inc (NYSE:CMG) will hand down its fourth quarter earnings on February 3, with UBS analysts expecting the fast casual restaurant chain's results to reflect continued pressure from industry and macroeconomic challenges, alongside signs of improvement heading into 2026.
“For CMG’s Q4 earnings, we expect pressured sales and earnings given industry and macro challenges, but with trends improving into Q1 and likely a better 2026 setup,” the analysts wrote.
UBS forecasts Q4 per share of $0.24 and full-year 2026 earnings per share of $1.20. This is in line with Wall Street estimates. The consensus is for revenue to increase 4.9% year-over-year to $2.98 billion.
Q4 same-store sales are expected to decline about 2.5% according to UBS, compared with consensus expectations for a roughly 3% decrease.
The analysts noted that softness in the quarter was likely mitigated by marketing campaigns, limited-time menu items such as the Red Chimichurri offering, and promotional events including Chip-or-Treat, Boorito, and a Thanksgiving buy-one-get-one promotion.
On margins, UBS expects continued pressure in Q4, modeling restaurant-level margins of 23%, down 170 basis points year-over-year and broadly in line with consensus. Higher beef costs, marketing investment, and softer sales are expected to weigh on profitability, partially offset by operational efficiencies.
UBS analysts said investor focus on the company’s earnings call is likely to center on early Q1 sales trends, the outlook for pricing, and updates on key sales drivers. These include limited-time offerings such as the return of Chicken al Pastor, marketing initiatives, and efforts to improve value perceptions among consumers.
Despite ongoing macroeconomic pressures, UBS wrote that Chipotle remains positioned for improved transaction growth in 2026, supported by increased menu innovation, marketing activity, digital initiatives, and easier year-over-year comparisons.
The analysts also cited potential stimulus benefits and continued unit expansion, with Chipotle expected to grow its restaurant base by about 9% annually while maintaining strong returns and a solid balance sheet.
UBS expects macro pressures to persist into 2026, particularly among lower-income consumers and younger demographics. However, the analysts see accelerating trends driven by additional protein-focused limited-time offerings, brand collaborations, digital enhancements, the Build-Your-Own Chipotle platform, and a catering pilot that currently represents a small portion of sales relative to peers.
The firm reiterated a ‘Buy’ rating on the stock with a price target of $45, based on approximately 21 times its next-twelve-month EBITDA estimate, noting that a return to stronger transaction and sales momentum could support further upside. Shares of Chipotle traded hands at $40 on Monday afternoon.
“While shares are up approximately 37% from recent lows and partially reflect optimism that trends will improve in 2026, we believe further upside still exists if same-store-sales can improve closer to mid-single-digit through the year, with additional support as CMG is set for continued 9% unit growth and a strong balance sheet,” UBS wrote.