?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
Chipotle Growth Story Intact, but 2013 Could be Volatile;
Lofty Expectations Creeping Into Stock
Morningstar Credit Rating
Industry
Restaurants
preliminary 2014 earnings per share forecast) or our positive
moat trend rating, though we will continue to monitor
Chipotle's ability to drive traffic amid an increasingly
competitive landscape.
by R.J. Hottovy, CFA
Director
Analyst covering this company do not
own its stock.
Analyst Note Feb. 06, 2013
With Chipotle CMG providing preliminary results in
We believe management's comments about maintaining
mid-January (including revenue of $699.2 million,
restaurant traffic levels by holding the line on pricing (at
comparable restaurant sales growth of 3.8%, and a
least through the first half of the year), implementing a
130-basis- point increase in food costs as a percentage of
greater call to action in its marketing messaging, and
sales to 33.5%), we turned our focus during the company's
nationwide expansion of its catering program validate our
fourth-quarter update to signals of increased competitive
concerns about the increasing competitive fast-casual
pressures (both from new fast-casual industry players as well
restaurant landscape. While we view Chipotle as one of the
as more aggressive promotional activity from traditional
clear leaders in this rapidly expanding restaurant category
quick-service and casual-dining players), management's
and remain confident that the company can outgrow the
pricing plans for 2013, and additional color regarding recent
broader restaurant group for years to come, we also continue
food-cost pressures. We generally view commodity cost
to see an increasing number of smaller, privately held chains
headwinds (driven primarily by higher beef and dairy prices
finding themselves with easier access to capital. Coupled
resulting from elevated feed and grain prices) as temporary
with management's expected 2% hit due to calendar shifts
in nature that should level off as 2013 progresses, but took
as well as tougher weather comparisons, first-quarter comps
management's comments discussing an increased emphasis
200
are likely to be well below historical trends (likely coming in
on driving traffic (holding the line on pricing near term,
flat to slightly positive), which will push operating margins
100
marketing message changes, catering efforts) as a
down (we've assumed a similar rate of contraction to the
confirmation of increased competition in the fast-casual
140-basis-point decrease to 14.3% in the fourth quarter). We
restaurant category.
expect management will revisit its pricing plans midway
Pricing as of Apr 03, 2013.
Rating as of Apr 03, 2013.
Currency amounts expressed with "$"
are in U.S. dollars (USD) unless
otherwise denoted.
Stock Price
500
400
300
0
09
10
11
12
13
through the year (with a midsingle-digit increase likely), and
We generally remain optimistic about the long-term unit
when paired with ongoing peak-hour throughput expansion
growth potential of Chipotle (which ultimately could expand
efforts, we expect full-year comp growth to recover to the
to 3,500 North American units under our base case
midsingle-digit range. Still, commodity cost pressures and
assumptions) as well as the opportunity that ShopHouse
labor expense deleverage during the first half of the year are
Southeast Asian Kitchen and international expansion offer.
likely to bring full-year restaurant margins and consolidated
However, with management's reminder that it needs
operating margins modestly below 2012 levels (27.1% and
midsingle-digit comparable restaurant sales growth to drive
16.6%, respectively).
leverage on the labor expense line (something that is not
likely to happen until the back half of 2013, especially with
Longer-term, our base-case assumptions continue to
expectations of losing 2 comp points in the first quarter due
forecast that annual restaurant openings across all concepts
to Leap Day and Easter calendar shifts and tougher
accelerate to approximately 200 units per year starting in
weather-related comparisons early in the year) and the
2015 (representing average annual unit growth of about
recent rally in the stock since the January
10%), aided by excess capacity in the commercial retail real
pre-announcement, we would approach this name cautiously
estate market and further rollout of its lower-cost Model A
over the near term and believe a wider margin of safety is
concept. We remain comfortable with the pricing power
required before taking a position. There is no change to our
inherent in the Chipotle brand, and believe the company can
$275 fair value estimate (representing about 25 times our
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
Morningstar Credit Rating
Industry
Restaurants
favorable unit economics (lower real estate and labor costs
Close Competitors
Currency (Mil)
Market Cap
TTM Sales
Oper Income
Net Income
McDonald's Corporation
USD
99,527
27,567
8,605
5,465
Yum Brands Inc
USD
30,442
13,633
2,294
1,597
Panera Bread Company, Inc.
USD
5,012
2,130
283
173
Brinker International, Inc.
USD
2,668
2,844
244
157
Wendy's Co
USD
2,208
2,505
123
7
than traditional casual-dining operators).
In our view, Chipotle also will outpace growth our estimates
for the fast-casual restaurant category thanks to ample unit
expansion opportunities. If the chain can match the density
of its home market in Denver, we estimate that it ultimately
could expand to 3,500 domestic units before nearing
support midsingle-digit comp growth over a longer horizon
saturation. The firm's new "A model" restaurant prototype,
(which puts total company growth in the low double-digit
which requires less capital and warrants lower occupancy
range over the next 10 years). Despite increased competition,
costs than legacy restaurants, could provide entry into
we remain comfortable with our outlook calling for
secondary markets and push this number even higher. We
restaurant margins pushing 30% and operating margins
also find Chipotle's push into new concepts (the company
eventually exceeding 20% over the next 10 years through
opened its second freestanding Asian-themed ShopHouse
increased scale (though we concede it may not be a straight
Southeast Asian Kitchen location in Washington, D.C., in
line in reaching these goals amid international and secondary
2012) and international markets (its initial Paris location
concept investments).
opened in the first quarter of 2012, and the third and fourth
London locations are set to open in the back half of the year)
Thesis Oct. 22, 2012
intriguing, but it probably will take several years before
Despite persistent industry volatility during the last several
either initiative has a meaningful impact on free cash flow.
years, Chipotle Mexican Grill has posted impressive top-line
growth and margin expansion. With a simple but uniquely
We like the company's strategy of doing just a few things,
customizable menu, aesthetically pleasing restaurant design,
but doing them very well. A basic menu structure reduces
and an average check of around $10, the firm can capture a
employee training costs but remains customizable. Because
larger share of the fast-casual restaurant category, in our
restaurants use an assembly line for food preparation, they
opinion. Although it still faces fierce competition from
can accommodate heavier restaurant traffic volumes than
quick-service and casual-dining chains, we believe the firm is
casual-dining chains. Restaurant designs combine simple
in the early stages of developing a narrow economic moat.
building materials with contemporary architecture styles,
keeping up-front capital requirements low and creating an
With approximately $2.3 billion in sales in 2011, Chipotle is
inviting atmosphere. The company also has developed a
the dominant player in the $6.0 billion fast-casual Mexican
strong culture by promoting from within, which has led to
restaurant category, beating out Qdoba JACK, Moe's
better-run restaurants and reduced turnover. The end product
Southwest Grill, Baja Fresh, and El Pollo Loco. Along with
of these operating strategies is superior unit economics
Panera Bread PNRA, the firm is also among the largest
(annual sales of more than $2 million per mature unit) and
players in the $27 billion fast-casual restaurant category. We
more than enough free cash flow to support growth
expect the fast-casual industry--which offers higher-quality
initiatives. As the firm expands its footprint, we expect
ingredients than quick-service chains but at lower average
returns on invested capital to improve from the midteens to
prices than casual-dining restaurants--to deliver
the mid-20% range.
high-single-digit growth over the next five years. This
exceeds our low-single-digit growth expectations for the
Valuation, Growth and Profitability
broader restaurant industry, as we believe fast-casual
We are trimming our fair value estimate to $275 per share
operators possess a more compelling value proposition and
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
Morningstar Credit Rating
Industry
Restaurants
from $300 due to a modest deceleration in
more than 150 basis points of restaurant margin
comparable-restaurant sales and new store productivity
improvement. We also anticipate modest operating margin
assumptions amid heightened fast-casual competition. Our
expansion over a longer horizon, especially as the firm
updated fair value estimate implies forward fiscal-year
expands its lower-cost "A Model" restaurant prototype,
price/earnings of 25 times, enterprise value/EBITDA of 13
builds scale, and leverages G&A expenses. Our model
times, and a free cash flow yield of 3%.
assumes operating margins improve from the low-17% range
in 2012 to around 19% in the next five years. Return on
Based on 7% comps and contribution from 165 new
invested capital should improve to the mid 20% range
restaurants (representing more than 13% unit growth), we
(compared with our 10.5% cost of capital assumption),
anticipate top-line growth of 20% in 2012. Facing a
suggesting the firm remains on track toward establishing an
challenging consumer spending environment and new
economic moat.
fast-casual competition, we believe comp growth will
decelerate to the low-single-digit range in the next few
Risk
quarters (down from earlier estimates in the mid-single
Rivalry in the restaurant industry appears to be intensifying.
range). Still, Chipotle possesses more pricing power than
Some quick-service restaurant chains are upgrading their
most restaurant chains and we expect comps to stabilize in
menus and decor, while many casual-dining firms have
the mid-single-digit range. In our view, there is sufficient
become more focused on enhancing their value proposition.
consumer demand to support midteen average annual
Additionally, with retail landlords looking for tenants for
revenue growth the next five years, including
unoccupied real estate and restaurant operators finding
low-double-digit unit growth and mid-single-digit comps.
themselves with easier access to capital in recent months,
Even though management historically has been conservative
we believe new fast-casual restaurant entrants will
with unit growth plans, we expect the company to open 200
increasingly come to the market in the months to come. If its
units per year starting in 2015 (including domestic and
brand appeal isn't as wide as we believe, Chipotle could face
international Chipotle and ShopHouse locations), implying
market saturation sooner than anticipated. Demographic
10% annual unit growth during the next decade.
shifts, an increasing number of meals prepared at home, and
ongoing consumer-spending headwinds could damp top-line
Chipotle's profitability continues to impress us, especially
results. Food, labor, energy, and occupancy cost volatility
for a relatively nascent restaurant operator. Restaurant
could disrupt results, especially if extreme weather
margins should remain in the high-20% range for the
conditions across much of the U.S. in 2012 put pressure on
foreseeable future, putting Chipotle in the upper echelon of
food costs later in 2013 and beyond.
all industry operators. However, extreme weather conditions
across much of the U.S. in 2012 already has put pressure on
Bulls Say
food costs, likely leading to flat to slightly declining
O We expect fast-casual restaurant category growth to
restaurant margins between 27.5%-28.0% next year. Our
outpace the broader restaurant industry during the next
model assumes operating margins in the low-17% range for
several years, driven by a compelling value proposition
2012 (compared with 15.4% in 2011), driven primarily by
and attractive unit economics.
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
O Chipotle is at the forefront of a restaurant industry
Morningstar Credit Rating
Industry
Restaurants
commodity costs. Because there are fewer suppliers of
movement toward naturally raised proteins, pasture-
naturally raised beef, chicken, and pork, food shortages
raised dairy products, and organic produce. Though these
and/or unpredictable pricing are possible.
are more costly to source, we believe fresh ingredients
are a key source of differentiation from other restaurant
O International prospects are intriguing, but could distract
the firm from its domestic growth plans.
chains.
O The "A Model" restaurant prototype requires less capital
Financial Overview
than traditional locations and could facilitate entry into
Financial Health:Chipotle is in solid financial health with
secondary markets.
negligible debt and enough cash from operations to fund
O Although it faces incumbent competition as it pushes into
growth initiatives. We expect the firm to increasingly return
new fast-casual restaurant categories, we believe
cash to shareholders through share repurchases (the
Chipotle's "Food with Integrity" mantra will resonate with
company has $135 million in authorized share repurchases
consumers outside of its traditional Mexican fare. We are
available as of September 2012).
optimistic about the growth of ShopHouse Southeast
Asian Kitchen, Chipotle's first Asian-themed restaurant
Company Overview
concept that opened in September 2011 and will expand
Profile: Chipotle Mexican Grill is the largest player in the $6
to Los Angeles in 2013.
billion fast-casual Mexican restaurant category. Its menu
O Chipotle has a pristine balance sheet and generates
includes burritos, bowls, tacos, and salads made from
sufficient cash flow to fund its growth efforts and share
higher-quality ingredients than at quick-service restaurants.
repurchases.
Because customers can choose from four different meats,
two types of beans, and an array of extras, more than 65,000
Bears Say
menu combinations are possible. As of September 2012, the
O Competition in the fast-casual restaurant industry is
firm operated 1,350 restaurants in 42 states, Canada, the
increasing, and switching costs are virtually nonexistent.
United Kingdom, and France.
Mexican concepts make up roughly 22% of the fastcasual restaurant industry in the United States.
Management: Chipotle features a seasoned management
Additionally, traditional QSR players like Yum Brands'
team with a great deal of restaurant industry experience.
Taco Bell are experimenting with more upscale menu
Chairman and co-CEO Steve Ells, who holds a degree from
offerings.
the Culinary Institute of America, founded Chipotle in 1993.
O Elevated unemployment and softer consumer confidence
President and co-CEO Montgomery Moran formally joined the
have led to a widespread decline in casual-dining guest
firm in early 2005, but had long served as Chipotle's general
traffic. Many casual restaurants have turned to aggressive
counsel. CFO Jack Hartung, a two-decade veteran of
discounting to reverse this trend, presenting additional
McDonald's MCD, has been with Chipotle since 2002. Ells
competition for fast-casual restaurants.
beneficially owns about 1.5% of the total equity (Class A and
O Chipotle must contend with a difficult consumer
environment, minimum-wage increases, and volatile
B common shares were collapsed into a single class of stock
in December 2009), which provides enough of an incentive to
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
Morningstar Credit Rating
Industry
Restaurants
increase shareholder value, in our view. Although we'd prefer
the roles of chairman and co-CEO to be split and the board to
declassify, we have not witnessed any abuses of power
under this corporate-governance structure.
Chipotle historically has been a solid allocator of capital,
with the majority of free cash flow used to fund growth
initiatives. Management also has been opportunistic with
share repurchases, buying back $388 million (an average
overall price of $117 per share) since 2008. However, we
view 2012 year-to-date share repurchases of $83 million at
an average price between $350-$400 per share (compared to
our $275 fair value estimate) as value destructive, restricting
our stewardship rating to standard.
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
Morningstar Credit Rating
Industry
Restaurants
Analyst Notes
Chipotle Delivers Solid 3Q, Though Not Up to Market
versus established markets). Management also attributed the
Expectations; Long-Term Assumptions Intact Oct. 19,
softness to "moderate and uncertain economic growth," and
2012
there has been speculation that Chipotle may be facing
For the second consecutive quarter, Chipotle Mexican Grill
increasing pressure from Taco Bell's YUM more upscale
CMG was among restaurant industry leaders with respect to
Cantina Bell menu. While we believe there is some validity
comparable-restaurant sales growth, average unit volume,
to these claims, we continue to believe the greater
and profitability, but failed to live up to the market's lofty
competitive threat is the number of new players entering the
expectations. For the third quarter, comparable-store sales
fast-casual restaurant market in 2012 (particularly among
grew 4.8% (16.1% on a two-year stacked basis), average unit
privately held chains with less than 50 units). With retail
volume for locations open for at least a year was $2.1
landlords looking for tenants for unoccupied real estate and
million, and restaurant-level margins improved 70 basis
restaurant operators finding themselves with easier access
points to 27.4%, thanks to Chipotle's highly leverageable
to capital, we believe the fast-casual restaurant market will
business model. However, these results were nominally
only become more crowded in the months to come.
below the Street's and our own internal expectations, which
triggered a steep stock price decline Friday morning. We plan
We believe increased competitive pressures may restrict
to make several adjustments to reflect what we believe to be
comparable-restaurant sales growth to the low single digits
a more competitive restaurant environment in the United
over the next few quarters (or midsingle digits should
States--particularly a meaningful increase in the number of
management decide to take pricing to offset likely
new fast-casual restaurant operators--which may result in a
commodity food cost pressures stemming from higher corn
moderate reduction to our $300 fair value estimate.
prices, a consideration that we've factored into our base
Nevertheless, we view today's sell-off as an overreaction by
case model assumptions). Nevertheless, we think investors
the market and believe the current share price could offer an
should balance these pressures with the reasons we've
attractive entry point for longer-horizon investors.
assigned Chipotle a positive moat trend: a disproportionate
amount of bargaining power over its suppliers (who are often
We remain optimistic about the long-term unit growth
local ranchers and farmers rather than large food processing
potential of Chipotle and its secondary concept, ShopHouse
conglomerates), a brand that commands pricing power, and a
Southeast Asian Kitchen (which plans to expand to a second
lower-cost business model than most restaurant operators.
market--Los Angeles--during the first half of 2013), as well as
The current share price represents roughly 24 times our
the leverage inherent in its business model. Still, there are a
preliminary 2013 earnings per share forecast and an
number of signs that the company is facing greater
enterprise value/EBITDA multiple of 12 times, compared with
competitive pressures, including a year-over-year moderation
industry averages of 17 and 11 times, respectively. However,
in restaurant traffic (which grew approximately 4.2% during
we believe Chipotle warrants a premium valuation because
the quarter, but well below the high-single-digit gains
of its considerable market share opportunities. We'd prefer a
experienced at the end of 2011), and decelerating new
wider margin of safety before taking a position until it is
average unit volume (though this can be partly chalked up to
clear that Chipotle can fend off new sources of competition,
a higher proportion of new restaurant openings in developing
but for the first time in several years, we believe Chipotle's
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
Morningstar Credit Rating
Industry
Restaurants
Analyst Notes (continued)
valuation represents realistic long-term growth expectations.
Accordingly, we forecast restaurant-level operating margins
and consolidated operating margins in the high 27% range
There were few changes to 2012 guidance, with
and the low 17% range for the year, consistent with our 2012
management sticking with its mid-single-digit
outlook. However, over the next decade, we remain
comparable-restaurant sales outlook (which also implies
comfortable with our outlook calling for restaurant margins
fourth-quarter comps decelerating from the third quarter due
pushing 30% and operating margins eventually exceeding
to more difficult comparisons and the roll-off of 30 basis
20%, which could set the stage for margin upside surprises
points of pricing). The company confirmed that it expects
over the medium term.
new restaurant openings to come in at or above the
previously announced range of 155-165 units (representing
Chipotle's 4Q Underwhelms; Food Cost Pressures
13%-14% growth), with roughly 20% coming from
Appear Temporary, but Competitive Concerns Linger
lower-capital A Model formats. Management introduced
Jan. 16, 2013
2013 guidance calling for flat to low-single-digit
Chipotle's CMG preliminary fourth-quarter results came as a
comparable-restaurant sales growth (which does not assume
surprise, as a sharp increase in food costs will result in
the impact of any price increases) and 165-180 new
earnings per share (management anticipates $1.92-$1.97 for
restaurant openings (representing 13% growth year over
the quarter) that will come in well short of consensus
year, with approximately 30% of the openings in new or
expectations ($2.09). Top-line growth of 17.2% to $699.2
developing markets). We view the comparable-restaurant
million was actually a bit better than we and the market
sales guidance as somewhat conservative and expect
anticipated (though it appears that much of the upshot was
mid-single-digit growth in 2013 due to menu price increases
the result of a pull-forward of new store openings) while the
to offset food cost inflation (which management pegs in the
comparable-store sales increase of 3.8%, or 14.9% on a
mid-single-digit range, with much of the pressure coming
two-year basis, was generally in line with internal and
from the corn, protein, and dairy categories) as well as
consensus expectations. While we are still garnering details
initiatives to drive greater throughput at peak hours. We
regarding the food cost increase--management chalked it up
remain comfortable with longer-term comparable-restaurant
to faster-than-expected underlying inflation--we generally
sales growth in the mid-single-digit range. Chipotle's
view the fourth-quarter cost pressures as temporary in nature
restaurant openings plans for 2013 seem reasonable based
and not reflective of structural damage to the leverage
on current commercial real estate availability, and our
inherent in Chipotle's business model or our positive moat
base-case assumptions continue to forecast that annual
trend rating. We remain optimistic about the long-term unit
restaurant openings across all concepts accelerate to
growth potential of Chipotle and its secondary concept,
approximately 200 units per year starting in 2015.
ShopHouse Southeast Asian Kitchen, as well as its highly
leverageable business model, though we think investors
Management doesn't explicitly forecast profitability, but we
need to balance this potential with an increasingly
expect very little margin improvement in 2013 amid
competitive fast-casual restaurant environment, including an
increased competition and food cost pressures (and probably
increasing number of smaller, privately held chains finding
some margin contraction in the first half of the year).
themselves with easier access to capital. We don't
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
Morningstar Credit Rating
Industry
Restaurants
Analyst Notes (continued)
anticipate a material change to our $275 fair value estimate,
quarter--which will put the company at 180 for the year and
since the top-line outperformance in the fourth quarter will
ahead of earlier expectations of "at or above a range of
effectively cancel out the profitability shortfall. Even after
155-165 units"--will alter 2013 restaurant opening plans. We
this morning's sharp pullback, we believe a wider margin of
view the comparable-restaurant sales guidance as somewhat
safety is required before investing until it is clear that
conservative and expect mid-single-digit growth in 2013 due
Chipotle can fend off new sources of competition.
to menu price increases to offset food cost inflation (which
seems more likely following the fourth-quarter food cost
On its third-quarter conference call, management forecast
pressures) as well as initiatives to drive greater throughput
food cost inflation in the low-single-digit range (driven
at peak hours. We also remain comfortable with longer-term
primarily by higher dairy and protein prices resulting from
comparable-restaurant sales growth in the mid-single-digit
elevated feed and grain prices) for the fourth quarter, so the
range. Chipotle's restaurant openings plans for 2013 seem
130-basis-point increase in food costs as a percentage of
reasonable based on current commercial real estate
sales to 33.5% was worse than anticipated. Still, based on
availability, and our base-case assumptions continue to
current spot prices, we agree with management's stance that
forecast that annual restaurant openings across all concepts
food costs will level off in 2013, especially toward the back
accelerate to approximately 200 units per year starting in
half of the year. As for our top-line outlook, we generally
2015.
believe comps reached a nadir, though increased competitive
pressures may restrict comparable-restaurant sales growth
Management doesn't provide profitability forecasts, but our
to the low to mid-single digits over the next few quarters, or
model had already baked in very little margin improvement in
mid- to high single digits should management decide to take
2013 amid increased competition and food cost pressures.
pricing to offset likely commodity food cost pressures (a
Accordingly, we forecast restaurant-level operating margins
consideration that we've factored into our base-case model
and consolidated operating margins in the high 27% range
assumptions). The current share price represents roughly 26
and the low 17% range for the year, consistent with our 2012
times our 2013 earnings per share forecast and an enterprise
outlook. However, over the next decade, we remain
value/EBITDA multiple of 13, which is consistent with
comfortable with our outlook calling for restaurant margins
multiples implied by our fair value estimate but ahead of
pushing 30% and operating margins eventually exceeding
industry averages of 16 and 9, respectively. We believe
20%, which could set the stage for margin upside surprises
Chipotle warrants a premium valuation because of its
as we lap elevated food costs.
considerable market share opportunities.
Chipotle Growth Story Intact, but 2013 Could be
There were no indications of other changes to
Volatile; Lofty Expectations Creeping Into Stock Feb.
management's 2013 outlook, which currently calls for flat to
06, 2013
low-single-digit comparable-restaurant sales growth (and
With Chipotle CMG providing preliminary results in
does not assume the impact of any price increases) and
mid-January (including revenue of $699.2 million,
165-180 new restaurant openings, though it's unclear
comparable restaurant sales growth of 3.8%, and a
whether the opening of 60 new restaurants during the fourth
130-basis- point increase in food costs as a percentage of
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
Morningstar Credit Rating
Industry
Restaurants
Analyst Notes (continued)
sales to 33.5%), we turned our focus during the company's
competitive landscape.
fourth-quarter update to signals of increased competitive
pressures (both from new fast-casual industry players as well
We believe management's comments about maintaining
as more aggressive promotional activity from traditional
restaurant traffic levels by holding the line on pricing (at
quick-service and casual-dining players), management's
least through the first half of the year), implementing a
pricing plans for 2013, and additional color regarding recent
greater call to action in its marketing messaging, and
food-cost pressures. We generally view commodity cost
nationwide expansion of its catering program validate our
headwinds (driven primarily by higher beef and dairy prices
concerns about the increasing competitive fast-casual
resulting from elevated feed and grain prices) as temporary
restaurant landscape. While we view Chipotle as one of the
in nature that should level off as 2013 progresses, but took
clear leaders in this rapidly expanding restaurant category
management's comments discussing an increased emphasis
and remain confident that the company can outgrow the
on driving traffic (holding the line on pricing near term,
broader restaurant group for years to come, we also continue
marketing message changes, catering efforts) as a
to see an increasing number of smaller, privately held chains
confirmation of increased competition in the fast-casual
finding themselves with easier access to capital. Coupled
restaurant category.
with management's expected 2% hit due to calendar shifts
as well as tougher weather comparisons, first-quarter comps
We generally remain optimistic about the long-term unit
are likely to be well below historical trends (likely coming in
growth potential of Chipotle (which ultimately could expand
flat to slightly positive), which will push operating margins
to 3,500 North American units under our base case
down (we've assumed a similar rate of contraction to the
assumptions) as well as the opportunity that ShopHouse
140-basis-point decrease to 14.3% in the fourth quarter). We
Southeast Asian Kitchen and international expansion offer.
expect management will revisit its pricing plans midway
However, with management's reminder that it needs
through the year (with a midsingle-digit increase likely), and
midsingle-digit comparable restaurant sales growth to drive
when paired with ongoing peak-hour throughput expansion
leverage on the labor expense line (something that is not
efforts, we expect full-year comp growth to recover to the
likely to happen until the back half of 2013, especially with
midsingle-digit range. Still, commodity cost pressures and
expectations of losing 2 comp points in the first quarter due
labor expense deleverage during the first half of the year are
to Leap Day and Easter calendar shifts and tougher
likely to bring full-year restaurant margins and consolidated
weather-related comparisons early in the year) and the
operating margins modestly below 2012 levels (27.1% and
recent rally in the stock since the January
16.6%, respectively).
pre-announcement, we would approach this name cautiously
over the near term and believe a wider margin of safety is
Longer-term, our base-case assumptions continue to
required before taking a position. There is no change to our
forecast that annual restaurant openings across all concepts
$275 fair value estimate (representing about 25 times our
accelerate to approximately 200 units per year starting in
preliminary 2014 earnings per share forecast) or our positive
2015 (representing average annual unit growth of about
moat trend rating, though we will continue to monitor
10%), aided by excess capacity in the commercial retail real
Chipotle's ability to drive traffic amid an increasingly
estate market and further rollout of its lower-cost Model A
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Chipotle Mexican Grill, Inc. CMG [XNYS] | QQ
Last Price
Fair Value
Consider Buy
Consider Sell
Uncertainty
Economic Moat™
Stewardship
323.79 USD
275.00 USD
165.00 USD
426.25 USD
High
None
Standard
Morningstar Credit Rating
Industry
Restaurants
Analyst Notes (continued)
concept. We remain comfortable with the pricing power
inherent in the Chipotle brand, and believe the company can
support midsingle-digit comp growth over a longer horizon
(which puts total company growth in the low double-digit
range over the next 10 years). Despite increased competition,
we remain comfortable with our outlook calling for
restaurant margins pushing 30% and operating margins
eventually exceeding 20% over the next 10 years through
increased scale (though we concede it may not be a straight
line in reaching these goals amid international and secondary
concept investments).
© 2013 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
?
Release date 03-29-2013 | FINRA Members: For internal use or client reporting purposes only.
Page 1 of 1
Chipotle Mexican Grill, Inc. Class A(USD)
CMG
Chipotle Mexican Grill, Inc. develops and operates fastcasual, fresh Mexican food restaurants throughout the
United States. It also has two restaurants in Toronto,
Canada and two in London, England and operates one
ShopHouse Southeast Asian Kitchen.
Last Close $
Sales $Mil
Mkt Cap $Mil
Industry
Currency
$325.87
$2,731
$10,112
Restaurants
USD
Morningstar Rating
Fair Value
Uncertainty
Fair Value
Economic Moat
Style
Sector
QQ
As of 03-28-2013
High
$275.00
None
—
—
—
—
—
—
Mid Growth
67.77 155.49 150.00 98.66 262.78 347.94 442.40 334.89
39.51 54.61 36.86 46.46 86.00 213.06 233.82 266.02
1401 Wynkoop Street
Denver, CO 80202
Phone: +1 303 595-4000
Website: http://www.chipotle.com
463.0
21.0
Growth Rates Compound Annual
Grade: B
Revenue %
Operating Income %
Earnings/Share %
Dividends %
Book Value/Share %
Stock Total Return
+/- Industry
+/- Market
1 Yr
3 Yr
5 Yr
10 Yr
20.3
30.0
29.4
—
19.9
-22.0
-27.8
-36.0
21.6
30.8
30.4
—
21.5
42.5
20.7
29.8
20.3
33.3
32.7
—
18.6
23.5
6.3
17.7
29.6
—
—
—
—
—
—
—
Ind
Mkt
Profitability Analysis
Grade: C
Current 5 Yr Avg
Return on Equity %
Return on Assets %
Revenue/Employee $K
Fixed Asset Turns
Inventory Turns
24.3
20.7
18.0
15.3
73.2
69.9
3.4
2.9
199.0 213.8*
Gross Margin %
Operating Margin %
Net Margin %
Free Cash Flow/Rev %
R&D/Rev %
27.1
16.7
10.2
8.2
—
25.2
14.1
8.7
8.4
—
32.1
19.7
12.4
8.2
— 1044.2
2.1
7.0
27.2
12.1
36.0
17.0
10.6
8.7
—
43.2
18.6
13.1
11.7
—
Financial Position (USD)
Grade: B
12-11 $Mil
12-12 $Mil
401
9
8
501
752
22
1425
51
—
157
—
381
1044
323
11
26
547
867
22
1669
59
—
187
—
423
1246
Cash
Inventories
Receivables
Current Assets
Fixed Assets
Intangibles
Total Assets
Payables
Short-Term Debt
Current Liabilities
Long-Term Debt
Total Liabilities
Total Equity
Valuation Analysis
Current 5 Yr Avg
Price/Earnings
Forward P/E
Price/Cash Flow
Price/Free Cash Flow
Dividend Yield %
Price/Book
Price/Sales
PEG Ratio
37.2
25.7
24.7
46.5
—
8.1
3.8
1.3
Annual Price High
Low
Recent Splits
Price Volatility
315.0
Monthly High/Low
99.0
Rel Strength to S&P 500
31.0 52 week High/Low $
442.40-233.82
9.0
10 Year High/Low $
2.0
442.40-36.86
34.1
—
18.6
37.2
—
6.6
3.1
—
*3Yr Avg data is displayed in place of 5 Yr Avg
Ind
Mkt
30.0
—
14.1
27.5
2.0
6.6
2.3
—
16.2
13.6
9.4
27.6
2.3
2.2
2.6
2.3
Trading Volume Thousand
2006
2007
2008
2009
2010
2011
2012
YTD
Stock Performance
158.0
152.5
153.3
—
4840
-57.9
-20.9
-45.4
—
1995
42.2
15.8
22.8
—
2776
141.2
126.2
105.8
—
6608
58.8
56.7
30.2
—
10570
-11.9
-27.9
-14.6
—
9249
9.6
-1.1
-2.5
—
10112
Total Return %
+/- Market
+/- Industry
Dividend Yield %
Market Cap $Mil
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1860
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
TTM
Financials (USD)
316
—
-8
-2.5
471
53.6
6
1.3
628
18.5
31
4.9
823
20.9
62
7.5
1086
22.3
108
10.0
1332
21.5
124
9.3
1518
24.9
204
13.4
1836
26.7
288
15.7
2270
26.0
351
15.5
2731
27.1
456
16.7
2731
27.1
456
16.7
Revenue $Mil
Gross Margin %
Oper Income $Mil
Operating Margin %
Net Income $Mil
-8
6
38
41
71
78
127
179
215
278
278
-0.34
—
22
—
0.08
—
56
—
1.43
—
26
—
1.28
—
32
14.53
2.13
—
33
17.08
2.36
—
33
19.34
3.95
—
32
22.34
5.64
—
32
26.09
6.76
—
32
33.37
8.75
—
32
40.07
8.75
—
32
40.15
Earnings Per Share $
Dividends $
Shares Mil
Book Value Per Share $
—
—
—
40
-96
-56
77
-83
-6
104
-97
6
147
-141
6
199
-152
46
261
-117
143
289
-113
176
411
-151
260
420
-197
223
420
-197
223
Oper Cash Flow $Mil
Cap Spending $Mil
Free Cash Flow $Mil
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
TTM
Profitability
-3.5
-4.4
1.42
-2.4
1.3
2.1
2.7
1.63
1.3
1.3
10.4
13.2
1.74
6.0
1.3
8.3
10.6
1.65
5.0
1.3
10.6
13.6
1.64
6.5
1.3
10.1
13.2
1.72
5.9
1.3
14.2
19.1
1.70
8.4
1.4
17.2
23.6
1.76
9.8
1.4
16.9
23.2
1.78
9.5
1.4
18.0
24.3
1.77
10.2
1.3
18.0
24.3
1.77
10.2
1.3
Return on Assets %
Return on Equity %
Asset Turnover
Net Margin %
Financial Leverage
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
12-12
Financial Health (USD)
—
192
—
-30
—
263
—
-28
—
309
—
-24
—
474
—
118
—
562
0.01
129
—
623
0.01
134
—
703
0.01
195
—
811
—
283
—
1044
0.00
344
—
1246
0.00
360
—
1246
0.00
360
Long-Term Debt $Mil
Total Equity $Mil
Debt/Equity
Working Capital $Mil
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
TTM
Valuation
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
44.4
—
2.1
3.9
17.0
69.0
0.0
4.5
8.6
33.2
26.2
0.0
1.5
3.2
10.4
22.3
0.0
1.9
3.9
10.9
37.7
0.0
3.7
8.1
23.3
50.0
—
4.7
10.1
26.1
34.0
0.0
3.5
7.4
22.5
37.2
2.3
3.8
8.1
24.7
Price/Earnings
P/E vs. Market
Price/Sales
Price/Book
Price/Cash Flow
Quarterly Results (USD)
Revenue $Mil
Most Recent
Previous
Close Competitors
Mar
Jun
Sep
Dec
640.0
509.0
690.0
571.0
700.0
591.0
699.0
596.0
Rev Growth %
Mar
Jun
Sep
Dec
Most Recent
Previous
25.8
24.3
20.9
22.4
18.4
24.1
17.2
23.7
Mar
Jun
Sep
Dec
1.97
1.46
2.56
1.59
2.27
1.90
1.95
1.80
Earnings Per Share $
Most Recent
Previous
Mkt Cap $Mil
Rev $Mil
P/E
ROE%
99968
32425
27567
13633
18.6
21.3
36.8
80.3
McDonald's Corporation
Yum Brands Inc
Major Fund Holders
% of shares
Fidelity Contrafund
T. Rowe Price Growth Stock
Harbor Capital Appreciation Instl
©2013 Morningstar. All Rights Reserved. The information, data, analyses and opinions contained herein (1) include the confidential and proprietary information of Morningstar, (2) may include, or be derived from, account
information provided by your financial advisor which cannot be verified by Morningstar, (3) may not be copied or redistributed, (4) do not constitute investment advice offered by Morningstar, (5) are provided solely for
informational purposes and therefore are not an offer to buy or sell a security, and (6) are not warranted to be correct, complete or accurate. Except as otherwise required by law, Morningstar shall not be responsible for any
trading decisions, damages or other losses resulting from, or related to, this information, data, analyses or opinions or their use. This report is supplemental sales literature. If applicable it must be preceded or accompanied
by a prospectus, or equivalent, and disclosure statement.
5.92
2.64
1.77
®
ß
Morningstar’s Approach to Rating Stocks
Our Key Investing Concepts
Economic Moat Rating
Discounted Cash Flow
Discount Rate
Fair Value
Uncertainty
Margin of Safety
Consider Buying/Consider Selling
Stewardship Grades
TM
At Morningstar, we evaluate stocks as pieces of a
business, not as pieces of paper. We think that purchasing
shares of superior businesses at discounts to their
intrinsic value and allowing them to compound their value
over long periods of time is the surest way to create
wealth in the stock market.
just on movement in the share price. If we think a stock’s
fair value is $50, and the shares decline to $40 without
much change in the value of the business, the star rating
will go up. Our estimate of what the business is worth
hasn’t changed, but the shares are more attractive as an
investment at $40 than they were at $50.
We rate stocks 1 through 5 stars, with 5 the best and 1
the worst. Our star rating is based on our analyst’s
estimate of how much a company’s business is worth per
share. Our analysts arrive at this "fair value estimate" by
forecasting how much excess cash--or "free cash
flow"--the firm will generate in the future, and then
adjusting the total for timing and risk. Cash generated
next year is worth more than cash generated several years
down the road, and cash from a stable and consistently
profitable business is worth more than cash from a
cyclical or unsteady business.
Because we focus on the long-term value of businesses,
rather than short-term movements in stock prices, at times
we may appear out of step with the overall stock market.
When stocks are high, relatively few will receive our
highest rating of 5 stars. But when the market tumbles,
many more will likely garner 5 stars. Although you might
expect to see more 5-star stocks as the market rises, we
find assets more attractive when they’re cheap.
Stocks trading at meaningful discounts to our fair value
estimates will receive high star ratings. For high-quality
businesses, we require a smaller discount than for
mediocre ones, for a simple reason: We have more
confidence in our cash-flow forecasts for strong
companies, and thus in our value estimates. If a stock’s
market price is significantly above our fair value estimate,
it will receive a low star rating, no matter how wonderful
we think the business is. Even the best company is a bad
deal if an investor overpays for its shares.
Our fair value estimates don’t change very often, but
market prices do. So, a stock may gain or lose stars based
Morningstar Research
Methodology for Valuing
Companies
Competitive
Analysis
Economic
TM
Moat Rating
Analyst conducts
company and industry
research:
The depth of the
firm’s competitive
advantage is rated:
Management
interviews
Conference calls
Trade-show visits
Competitor, supplier,
distributor, and
customer interviews
None
Narrow
Wide
We calculate our star ratings nightly after the markets
close, and issue them the following business day, which is
why the rating date on our reports will always be the
previous business day. We update the text of our reports
as new information becomes available, usually about once
or twice per quarter. That is why you’ll see two dates on
every Morningstar stock report. Of course, we monitor
market events and all of our stocks every business day, so
our ratings always reflect our analyst’s current opinion.
TM
Economic Moat Rating
TM
The Economic Moat Rating is our assessment of a firm’s
ability to earn returns consistently above its cost of capital
in the future, usually by virtue of some competitive
advantage. Competition tends to drive down such
Company
Valuation
Fair Value
Estimate
Analyst considers
company financial
statements and
competitive position
to forecast future
cash flows.
DCF model leads to
the firm’s Fair Value
Estimate, which
anchors the rating
framework.
Uncertainty
Assessment
An uncertainty
assessment
establishes the
margin of
safety required for
the stock rating.
QQQQQ
Q
QQ
QQQ
QQQQ
QQQQQ
The current stock
price relative to fair
value, adjusted
for uncertainty,
determines the
rating.
Assumptions are
input into a discounted cash-flow
model.
© 2012 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
®
ß
Morningstar’s Approach to Rating Stocks (continued)
economic profits, but companies that can earn them for an
extended time by creating a competitive advantage
possess an Economic Moat. We see these companies as
superior investments.
Very High, or Extreme. The greater the level of uncertainty,
the greater the discount to fair value required before a
stock can earn 5 stars, and the greater the premium to fair
value before a stock earns a 1-star rating.
Discounted Cash Flow
Margin of Safety
This is a method for valuing companies that involves
projecting the amount of cash a business will generate in
the future, subtracting the amount of cash that the
company will need to reinvest in its business, and using
the result to calculate the worth of the firm. We use this
technique to value nearly all of the companies we cover.
This is the discount to fair value we would require before
recommending a stock. We think it’s always prudent to
buy stocks for less than they’re worth.The margin of safety
is like an insurance policy that protects investors from bad
news or overly optimistic fair value estimates. We require
larger margins of safety for less predictable stocks, and
smaller margins of safety for more predictable stocks.
Discount Rate
We use this number to adjust the value of our forecasted
cash flows for the risk that they may not materialize. For a
profitable company in a steady line of business, we’ll use
a lower discount rate, also known as "cost of capital,"
than for a firm in a cyclical business with fierce
competition, since there’s less risk clouding the firm’s
future.
Consider Buying/Consider Selling
The consider buying price is the price at which a stock
would be rated 5 stars, and thus the point at which we
would consider the stock an extremely attractive
purchase. Conversely, consider selling is the price at
which a stock would have a 1 star rating, at which point
we’d consider the stock overvalued, with low expected
returns relative to its risk.
Fair Value
This is the output of our discounted cash-flow valuation
models, and is our per-share estimate of a company’s
intrinsic worth. We adjust our fair values for off-balance
sheet liabilities or assets that a firm might have--for
example, we deduct from a company’s fair value if it has
issued a lot of stock options or has an under-funded
pension plan. Our fair value estimate differs from a "target
price" in two ways. First, it’s an estimate of what the
business is worth, whereas a price target typically reflects
what other investors may pay for the stock. Second, it’s a
long-term estimate, whereas price targets generally focus
on the next two to 12 months.
Uncertainty
To generate the Morningstar Uncertainty Rating, analysts
consider factors such as sales predictability, operating
leverage, and financial leverage. Analysts then classify
their ability to bound the fair value estimate for the stock
into one of several uncertainty levels: Low, Medium, High,
Stewardship Grades
Our corporate Stewardship Rating represents our
assessment of management’s stewardship of shareholder
capital, with particular emphasis on capital allocation
decisions. Analysts consider companies’ investment
strategy and valuation, financial leverage, dividend and
share buyback policies, execution, compensation, related
party transactions, and accounting practices. Corporate
governance practices are only considered if they’ve had a
demonstrated impact on shareholder value. Analysts
assign one of three ratings: "Exemplary," "Standard," and
"Poor." Analysts judge stewardship from an equity holder’s
perspective. Ratings are determined on an absolute basis.
Most companies will receive a Standard rating, and this is
the default rating in the absence of evidence that
managers have made exceptionally strong or poor capital
allocation decisions.
© 2012 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.
Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
®
ß