When you are trading stocks online, it is important to remember that various factors could affect the value of stocks. Even smart ads can help raise the stock value!
That's what Chipotle Mexican Grill ($CMG) did. Investors' confidence in this fast food chain has risen after it launched an ad campaign nationwide through which it is giving the message that its cuisine is healthier than what rivals offer.
Chipotle on an Upward Path
Shares of Chipotle had already begun to rise after the company's announcement that one-third of the 12 directors it has won't be due for re-election during the next annual general meeting. Now this ad, which intends to build goodwill among the general public, led to the shares climbing 1.55% to $454.28. Remember, Chipotle has been struggling to get its image sorted out and win back market share following some outbreaks of food-borne illnesses in late-2015 that affected its sales and reduced consumer confidence in the company.
But this new ad campaign called "As Real as It Gets" seems to have worked since it has really restored investor confidence in the brand; and it could go a long way in restoring consumer confidence as well. The new ad marks the first time the company has used national broadcast television for promotional purposes.
Spreading the Natural Ingredients Message
Developed by ad agency Venables Bell & Partners, the ad highlights the point that Chipotle is America’s only restaurant chain that does not add artificial flavors, preservatives or colors to its food. The ad features comedians, John Mulaney, Jillian Bell and Sam Richardson, and they certainly manage to drive home the point in 'playful humor', according to Mark Crumpacker, Chief Marketing and Development Officer at Chipotle.
Goldman Sachs Predicts Growth
Another positive for Chipotle is that Goldman Sachs recently predicted the fast food chain would be among the few companies that would experience profit growth in the next two years. It expects the company's profit margin in 2017 to broaden by 372 basis points, and its 2018 profit margin to further increase by 114 basis points.
Its Q4 earnings were below the expectations of analysts. However, the company believes its 2017 Q1 sales have picked up thanks to the digital ordering technology it has employed which has reduced waiting times at its restaurants by nearly 50%. Its next earnings report is due to be issued on April 25, after the closing of the market.
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