Chipotle Mexican Grill (CMG) Stock Recommendation Tracy Britt SWS Co-Founder smartwomansecurities © 2006 Smart Woman Securities. All materials are for SWS members’ use only march 17, 2007

Chipotle (CMG)

The Story Started in 1993 Subsidiary of MCD IPO in January 2006 Food with integrity Transforming casual dining

The People CEO – Steve Ells Low turnover relative to industry

Rivalry: Qdoba, Other Casual Dining Barriers to Entry: Capital, Concept, Failure Substitutes: Very Easy to Substitute Supplier Power: Not Relevant Buyer Power: Becoming Stronger, Use of Organic Market, Expansion of All- Natural and Organic Porter’s Five Forces

IPO in January 2006 at $22 –Doubled in one day to $45 Currently trading at $41 52 week high/low: $49/$22 Short term expected target to remain in the $35-$45, but expect long term to rise to $55 Technical Analysis

Fundamental Analysis Company EPS Growth % P/E Cheesecake Factory Inc Starbucks Corp P.F. Chang's China Bistro Inc Brinker International Inc Chipotle Mexican Grill Inc Wendy's International Inc Outback Steakhouse Inc Yum! Brands Inc Darden Restaurants Inc McDonald's Corp $470.7 million of sales in 2004 and we sales rose more than 29%, to over $610 million, in 2005 No long term debt Current ratio of 3.8

Revenue Growth

Average Store Sales

Store Growth

Same Store Sales Growth

Investment Risks Transition from MCD Margin Issues Changing Trends Health Concerns Organic/Natural Products, i.e. Input Costs

Investment Opportunities Strength of Concept Market Readiness for “Food with Integrity” Growth of Casual Dining Demonstrated Growth of CMG Market Response to IPO Financial Metrics and Growth Going Forward

Investment Recommendation Despite the current valuation of the stock, we believe that CMG will excel in the coming years in response to the growing casual dining segment and an emphasis on natural eating. We rate the stock as a BUY at market price and recommend that Smart Woman Securities invest in the entity.

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