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Key Takeaways
- Analysts named Chipotle a top restaurant stock pick, saying shares are selling at a discount but trends could improve amid new business strategies.
- Conditions are generally expected to improve in 2026 for restaurants, especially fast-casual ones, though analysts were divided on Starbucks’ trajectory.
Investors may want to take another look at what Chipotle’s cooking.
The burrito chain’s stock fell out of favor with investors as its core audience of young, higher-earning diners cut back on eating out in recent months. But investors can scoop up shares at a discount—their prices dropped nearly 40% in 2025—and analysts say Chipotle Mexican Grill (CMG) is making a number of promising business moves.
Chipotle was a top restaurant investment pick for both Oppenheimer and Deutsche Bank, who say more limited-time offers and fresh sauces may drive diners to its restaurants. The restaurant’s new high-protein menu, with smaller, lower-cost options, may also appeal to Americans focused on weight loss, including those on GLP-1 medications, Oppenheimer said.
Chipotle may be on the verge of a “spicy revival story,” Oppenheimer said in a Tuesday note. “Against much lower expectations in [2026], the company has much more aggressive sales drivers.”
“The brand still [has a] best-in-class price/value offering which could be better rewarded more so than peers if consumers improve food-away-from home spend,” Oppenheimer’s research note said.
Why This Matters to Investors
Spending at restaurants may not change dramatically for a few months, according to market watchers. The impact of some potential catalysts, such as the World Cup and tax code changes, likely won’t emerge until spring or summer.
Oppenheimer gave Chipotle a price target of $51; Deutsche, of $49. Other analysts are less optimistic that shares will climb so much past the current price of about $39. Wall Street’s consensus target is near $46, according to Visible Alpha’s poll.
Pressure on low-income and younger consumers made 2025 tough for restaurants. An estimated 2 million to 3 million people left the country amid restrictive immigration policies, which didn’t help the industry, analysts said.
They don’t expect conditions to worsen in 2026, and Deutsche Bank said sales may pick up thanks to the World Cup, the United States’ 250th anniversary, and tax changes that lower costs for some consumers.
New tax policies are less likely to impact low-income consumers, which may mean quick-service restaurants will continue to face pressure, Deutsche Bank said. Still, McDonald’s (MCD) and Domino’s Pizza (DPZ) are well-positioned to succeed in this environment, analysts said.
Fast-casual and casual dining will likely fare better, Deutsche Bank said. Deutsche Bank and Oppenheimer both favored Oliver Garden owner Darden Restaurants (DRI) and Shake Shack (SHAK), but disagreed on Starbucks’ (SBUX) trajectory.
The Seattle-based chain was one of Deutsche Bank’s top picks, but Oppenheimer said sales would have to increase dramatically for it to feel confident the company’s earnings will bounce back. “The bottom line: we are forced to remain cautious,” they wrote.
