Log In

Enter your username and password below

Chipotle Leaves GMOs for Outdated Chains

Millennials are triggering two movements when it comes to dining options in America.

First, we’re seeing more “fast casual” restaurants instead of traditional fast food establishments.

And second, since Millennials are more health conscious than previous generations, we’re seeing healthier options spring up at these locations.

Well, Chipotle (CMG) just made a bold move that ensures this generation will continue to flock to its restaurants for years to come. And investors should enjoy the upward momentum that the company enjoys as a result…

Everyone Loves It

The public is becoming increasingly concerned with the negative effects of genetically modified organisms (GMOs) in food.

The Journal of Organic Systems shows a correlation between GMOs and 22 diseases.

So to keep its patrons happy, on April 27, Chipotle announced that its ingredients would be strictly non-GMO.

Chipotle’s brave move is winning brownie points all around.

After all, the brand is known for its “food with integrity.” So the decision isn’t just to boost the company’s bottom line. And it’s actually something the popular food chain had been considering for some time.

“They announced a couple of years ago that they were hoping to pull this off within the next couple of years,” according to Technomic’s Mary Chapman.

Chapman adds that “knowing the supply chain and how much corn, and soy, and other products are genetically modified, it’s pretty amazing that they have been able to find the resources to supply their chain.”

Indeed. About 90% of U.S. corn is genetically modified. So the decision to ditch GMOs is no small feat. Take a look for yourself!


Well-Deserved Responses

On the heels of last Monday’s news, BMO Capital upgraded CMG shares to “Outperform” from “Market Perform.” It also increased its price target on Chipotle shares to $760. Compare that to the firm’s previous target of $693. That’s an almost 10% increase. As BMO puts it, the company is a “compelling investment.”

Even more, TheStreet pegs Chipotle as a “Buy,” giving it a ratings score of “B.” According to its ratings team, “The company’s strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, good cash flow from operations, impressive record of earnings per share growth, and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins.”

Bottom line: As the first major U.S. restaurant chain to ditch GMOs, Chipotle is well ahead of the game in its industry. Competitors should follow in its footsteps soon if they want to keep up.

Where innovation meets investing,

Nikia Wade

Nikia Wade

, Technology Correspondent

View More By Nikia Wade