Starbucks vs. Chipotle: Both Restaurants Are Seeing Turnarounds, but Which Stock Is the Better Buy Today?
Chipotle shares shot up after strong Q2 earnings, but Starbucks stock could be the better buy.
Overview
When Brian Niccol left Chipotle Mexican Grill (NYSE: CMG) to run Starbucks (NASDAQ: SBUX), the two stocks became intertwined to see which one would outperform. Thus far in 2026, Starbucks stock has been the clear winner. However, after both restaurant operators reported better-than-expected results this past quarter, it was Chipotle's shares that were soaring higher.
When it comes to valuation, neither Starbucks nor Chipotle are exactly in the bargain bin. The former trades at a forward price-to-earnings ratio (P/E) of around 35.5 times estimates for fiscal 2027 (ending September 2027), while the latter trades at 28.5 times the 2027 consensus. That means that the stock which outperforms is largely going to come down to execution, and this gives Starbucks the edge.
Details
Both restaurant operators produced same-store sales (comps) last quarter that came in above analyst expectations. Chipotle saw its comps rise 2.2%, with a 1% gain in traffic and a 1.2% increase in check size. That was above the 1.3% consensus, based on Bloomberg data, as management credited menu innovations, like honey chicken and its cilantro lime sauce, together with marketing and its loyalty program for its results.
Source
Originally published at www.fool.com.