Chipotle Mexican Grill

1 Introduction, Methodology and Structure
1.1 Introduction The main objective of this bachelor thesis is to value Chipotle Mexican Grill, Inc., a U.S. based fast-casual restaurant chain, as December of 2016. The reason why the author picked Chipotle as the target company of this valuation thesis is that recently Chipotle had suffered from a foodborne illness crisis, which had severely impacted its public image as well as its 2016 financial performance (Chipotle Mexican Grill, Inc. [CMG], 2017). However, as December 30, 2016, Chipotle closed at $377.32 in New York Stock Exchange (NYSE), trading at 489.7 times its 2016 net income. This P/E ratio of 489.7x seemed astonishingly high for a restaurant company that was struggling with the negatively

Moreover, a financial and benchmarking analysis is performed to assess the financial performance of Chipotle over the past few years, especially relative to its peer group. What is more, a strength, weakness, opportunity and threat analysis is also included in the thesis.
Finally, the valuation methods used for the valuation of Chipotle are the discounted cash flow (DCF) analysis and the comparable company analysis. These two methods are chosen because they are the most frequently used valuation methods in the industry. Moreover, these two methods are complementary to each other: while the DCF analysis is forward-looking and relies on the assumptions specific to the target company, the comparable company analysis considers the current market conditions and the industry-wide

The third section is devoted to the financial analysis and benchmarking, which focuses on the financial performance of Chipotle over the past five years.
The fourth section is the SWOT analysis, which describes the strengths, weaknesses, opportunities and threats that Chipotle possesses.
The fifth section, concerning the discounted cash flow analysis, is the central part of this thesis. The DCF analysis aims to figure out the intrinsic value of Chipotle.
The sixth section is the sensitivity analysis that complements the DCF analysis. The sensitivity analysis assesses the impacts that changes in key inputs in the DCF analysis may have in the final share price of Chipotle.
The seventh section is comparable company analysis, also known as the valuation multiples approach. The comparable company analysis values the target company through the use of valuation multiples at which the peer group trades in the market.
The eighth section is the conclusion of this thesis that summarizes the key ideas and findings of the work, identifying the fair equity value of