As fast food restaurant chain Chipotle Mexican Group Inc. (CMG) prepares to post its most recent third quarter results on Oct 25., one team of bulls recommends buying the shares ahead of a likely earnings beat, as outlined by Barron's

Burrito Chain 'Less Susceptible to Negative Forces' Weighing on Broader Market

In a recent research note, Maxim Group analyst Stephen Anderson lifted his 12-month price target on shares of Chipotle from $500 to $510, implying an over 20% upside from current levels. He is forecasting for earnings of $2.35 per share in Q3 and EPS at $13.55 for the full year, compared to the consensus estimate at $2.02 and $12.02 respectively, according to FactSet data. 

Anderson views the burrito maker as “less susceptible to negative forces affecting the broader market,” such as China trade wars and rising interest rates. As a result, Chipotle stands in an "enviable position" among its large-cap restaurant peers, wrote the bull. 

While Chipotle shares have fallen into correction territory since mid-August, posting a roughly 20% decline from their 52-week high, the Maxim Group analyst indicates that the company's 99% U.S. exposure and zero debt balance makes it a safe and attractive value play. 

Earlier this year, Chipotle hired new CEO Brian Niccol, who formerly served at the helm of Taco Bell. New management has doubled down on improving food safety to combat years of negative media attention and foodborne illness scares, and has championed an "innovation-first culture" aimed at revamping foot traffic. 

Maxim Group's upbeat note echoes a bullish report from analysts at RBC earlier this week, upgrading the restaurant chain to outperform. RBC analyst David Palmer also lifted his price target to $510, citing opportunitiies for same store sales growth via strategic initiatives such as an ongoing menu revamp, digital and delivery offerings and other marketing efforts. 

Trading down about 2.3% on Wednesday morning at $424.38, Chipotle stock reflects a 46.8% gain year-to-date (YTD), outperforming the broader S&P 500's 1.7% return over the same period.