It was noted by the CITIC Securities that the Mexican-flavored fast food chainstore Chipotle (CMG.US) had a 50-to-1 stock split last Wednesday. Bernstein analyst Danilo Gargiulo gave the stock a rating of "outperforming the market" with a target price of $80.

Chipotle is going to implement a significant stock split plan. This split ratio is up to 50 to 1, and is expected to become one of the largest stock splits in the history of the New York Stock Exchange.

Gargiulo pointed out that Chipotle extending their business hours is a leverage, and Wall Street has long anticipated this Mexican burrito chain to open late-night or breakfast business hours.

Improving Chipotle's loyalty program may also boost sales. With loyalty rewards program, the chainstore can increase its own loyalty perks through personalized products. Although the chainstore has not disclosed how many reward members it has, digital sales accounted for 36.5% of food and beverage revenue in the first quarter.

Chipotle's main audience is Generation Z, who also provide an important development platform for the company as this group becomes increasingly the decision-makers of their households.

Gargiulo wrote that Generation Z has a close brand association with Chipotle, and on TikTok, Generation Z has more interactions with Chipotle than their peers, and the audience on TikTok is generally younger, primarily 18 to 24 years old.

Gargiulo pointed out that Chipotle's category strength has brought the company another favorable wind.

Chicken is becoming more and more popular, and protein that is cheaper is more suitable for consumers' tighter wallets, and it meets the trend of healthy eating, and also provides more innovation space for enterprises. Gargiulo expects the chicken market for limited-service restaurants to grow by 7% in the next five years.

The leisure dining market in Latin America is also growing rapidly. From 2018 to 2023, the market grew by 8%, and it is expected to grow by another 6% from 2023 to 2028.

Gargiulo also pointed out that Chipotle's category strength has brought the company another favorable wind.

As Yahoo Finance previously reported, chicken is becoming more and more popular, and protein that is cheaper is more suitable for consumers' tighter wallets, and it meets the trend of healthy eating, and also provides more innovation space for enterprises. Gargiulo expects the chicken market for limited-service restaurants to grow by 7% in the next five years.

The leisure dining market in Latin America is also growing rapidly. From 2018 to 2023, the market grew by 8%, and it is expected to grow by another 6% from 2023 to 2028.

Investors hope that the momentum of the past few quarters will continue. In the first quarter, Chipotle's revenue, profits, and same-store sales once again exceeded expectations.

After the stock split, Chipotle's stock price is still higher than the $22 per share when the company went public in 2006. At the close of trading on Thursday, the stock price hovered around $62 per share.

TD Cowen analyst Andrew Charles wrote that the company believes Chipotle has a chance to achieve mid-single-digit same-store sales in the medium term, thanks to its omnichannel model, Chipotlane drive-thru innovation, and consumers' interest in ingredient transparency. Charles currently has a target price of $72 for the stock.

Usually, stock splits are good news for companies that split stocks. According to the Bank of America analysis, the average return after a stock split is 25%, while the average return for the market is about 12%.