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Recent Articles
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Chipotle Targets 7,000 Restaurants in North America
Oct 30, 2024
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For 2024, management is targeting full-year comparable restaurant sales growth in the mid to high-single digit range, while it adds 285-315 new company-operated restaurant openings with 80% having a Chipotlane. For 2025, Chipotle is targeting opening 315-345 company-operated restaurants with over 80% having a Chipotlane. Though comparable restaurant sales were lower than the consensus forecast in the third quarter, we like Chipotle’s long-term plans calling for 7,000 restaurants in North America, up from the 3,600 restaurants it currently has in the U.S., Canada, the United Kingdom, France, Germany, and Kuwait. Chipotle remains a key idea in the Best Ideas Newsletter portfolio.
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Visa Reports Strong Fiscal Fourth Quarter Results
Oct 30, 2024
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Image: Visa’s shares look poised to break out to new all-time highs.
At the end of the quarter, Visa’s cash and investment securities totaled $17.7 billion, while long-term debt stood at $20.8 billion, reflecting a modest but manageable net debt position. Visa returned $6.8 billion to investors in the form of share repurchases and dividends during the fiscal fourth quarter, while the board increased Visa’s quarterly cash dividend 13%, to $0.59 per share. For the twelve months ended September 30, Visa put up a 65.7% operating margin and a free cash flow margin of 52%. We continue to like Visa as a top idea in the Best Ideas Newsletter portfolio. The high end of our fair value estimate range stands at $329 per share.
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Momentum Across Alphabet’s Business Is “Extraordinary”
Oct 29, 2024
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Image: Shares of Alphabet look poised to break out to all-time highs.
Alphabet ended the quarter with $93.2 billion in total cash and marketable securities and long-term debt of $12.3 billion. Cash flow from operations in the quarter was $30.7 billion, while capital spending totaled $13.1 billion, resulting in robust free cash flow generation of $17.6 billion. Year-to-date, cash flow from operations was $86.2 billion on capital spending of $38.3 billion, good for free cash flow generation of $47.9 billion. Alphabet also announced a cash dividend of $0.20 per share, to be paid to each of the company’s Class A, Class B, and Class C shares. Our fair value estimate stands at $188 per share.
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Enterprise Product Partners’ DCF Covered Its Distributions 1.7x in Third Quarter
Oct 29, 2024
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Image: Enterprise Products Partners’ units have done well the past couple years.
Enterprise’s distributable cash flow [DCF] was $1.96 billion for the third quarter, up 5% from the $1.87 billion it registered in the same period a year ago. Distributions during the third quarter increased 5% to $0.525 per common unit, with DCF providing 1.7x coverage of the distribution declared for the third quarter. The midstream energy company expects organic growth capital investment for 2025 in the range of $3.5-$4 billion to reflect opportunities in the Permian Basin and with its acquisition of Piñon Midstream. Our fair value estimate of Enterprise Products Partners stands at $30 per share. Units yield 7.2% at the time of this writing.
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