chipotle cmg fairly valued buying index™ 6 value rating

Valuentum Retail Equity Research Ratings as of 16-Apr-2021 Data as of 15-Apr-2021

Buying Index™ 6 Value RatingEconomic Castle

Highest Rated

Investment ConsiderationsDCF ValuationRelative Valuation

Stock Chart (weekly) ValueCreation™ValueRisk™ValueTrend™Cash Flow GenerationFinancial LeverageGrowthTechnical EvaluationRelative StrengthMoney Flow Index (MFI)Upside/Downside Volume (U/D)Near-term Technical Support, 10-week MADCF = Discounted Cash Flow; MFI, U/D = Please see glossary. MA = Moving Average

Business Quality ValueCreation™

ValueRisk™ Very Poor Poor Good ExcellentCompany Vitals Investment HighlightsMarket Cap (USD) $43,829 Avg Weekly Vol (30 wks) 1,39930-week Range (USD) 1172.29 - 1579.52Valuentum Sector Consumer Discretionary5-week Return 7.3%13-week Return 2.6%30-week Return 22.1%Dividend Yield % 0.0% Firms that generate economic profits with little operating variability score near the top right of the matrix.

Dividends per Share 0.00 Relative Valuation Forward P/E PEG Price / FV

Forward Dividend Payout Ratio 0.0% Disney 89.8 NMF 97.9%Est. Normal Diluted EPS 43.23 Home Depot 22.9 1.9 106.7%P/E on Est. Normal Diluted EPS 35.7 McDonald's 27.1 1.7 109.4%Est. Normal EBITDA 2,098 Nike 52.8 2.5 104.9%Forward EV/EBITDA 32.7 Peer Median 40.0 NMF 105.8%EV/Est. Normal EBITDA 20.4 Chipotle 65.5 3.1 111.8%Forward Revenue Growth (5-yr) 15.6% Price / FV = Current Stock Price divided by Estimated Fair Value

Forward EPS Growth (5-yr) 39.6% Financial Summary ProjectedNMF = Not Meaningful; Est. = Estimated; FY = Fiscal Year

Fiscal Year End: Dec-19 Dec-20 Dec-21

Returns Summary 3-year Historical Average Revenue 5,586 5,985 7,260Return on Equity 18.1% Revenue, YoY% 14.8% 7.1% 21.3%Return on Assets 8.0% Operating Income 478 336 835ROIC, with goodwill 39.0% Operating Margin % 8.6% 5.6% 11.5%ROIC, without goodwill 39.8% Net Income 350 356 668ROIC = Return on Invested Capital; NMF = Not Meaningful Net Income Margin % 6.3% 5.9% 9.2%Leverage, Coverage, and Liquidity Diluted EPS 12.37 12.53 23.55In Millions of USD Diluted EPS, YoY % NMF NMF 88.0%Total Debt 0 Free Cash Flow (CFO-capex) 388 291 772Net Debt -952 Free Cash Flow Margin % 6.9% 4.9% 10.6%Total Debt/EBITDA 0.0 In Millions of USD (except for per share items)

Net Debt/EBITDA NMF LARGE-CEBITDA/Interest Excellent NEUTRALCurrent Ratio 1.6Quick Ratio 1.5

• Investors should be aware of the generosity in ourassumptions. We are expecting low double-digitannual revenue growth through 2025 and assumeChipotle significantly expands its operating marginover this period, aided by economies of scale.

NMF = Not Meaningful

The information and data contained in this report is not represented or warranted to be timely, complete, accurate, or correct. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this report, you should consider whether the information is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

Structure of the Restaurants Industry - Fast Casual & Full ServiceThe restaurant industry has benefited from a long-term trend toward eating out, but the space has become increasingly more competitive as new concepts are introduced and successful chains expand. Not only are there pricing pressures and trade-down threats, but rising costs for commodities and labor have pressured profits. Barriers to entry are low, and many constituents have a difficult time differentiating themselves. We tend to like larger chains that benefit from scale advantages and international expansion opportunities, though niche franchises can be appealing. We’re neutral on the structure of the group.

• In March 2021, Chipotle announced that it wouldaccelerate its growth strategy in Canada largely byopening up new restaurants in the country. Chipotlecontinues to aggressively invest in its drive-thruoperations which the firm refers to as Chipotlanes.

• Chipotle has been on a rollercoaster ride in the pastfew years--beginning with the food safety scandal thatcaused substantial drops in same-store sales startinglate 2015--and the restaurant is facing strengthenedcompetition from Yum! Brands' Taco Bell, andQdoba. However, top-line growth is back on track in abig way, and the company is re-focused on innovation.

----- Actual -----

• Chipotle’s growth story rests on its ability tocontinue growing its physical store count while alsoexpanding its digital operations. The company recently signed new delivery partnerships with Uber Eats andGrubhub, while also expanding its digital operationsinto Canada. Innovations on the digital front will bekey.

Medium 1High

Low• Chipotle serves a focused menu of burritos, tacos,burrito bowls (a burrito without the tortilla) andsalads, made using fresh ingredients. It prides itself ontrying to find the highest-quality ingredients ('FoodWith Integrity') and providing an exceptionalrestaurant experience. The company was founded in1993 and is based in Denver, Colorado. Very High

BULLISHWEAK

NEUTRALDETERIORATING

1460.00

The week with the highest trading volume out of the last 30 weeks was a week of heavy selling, or distribution (red bar).

EXCELLENTMEDIUM

NEGATIVESTRONG

LOWAGGRESSIVE

We raised our fair value estimate for Chipotle (again) as its growth runway remains impressive, underpinned by ongoing investments in its drive-thru and digital operations.

FAIRLY VALUEDNEUTRAL

Industry $1379.00 $965.00 - $1793.00 LARGE-CAP GROWTH Consumer Discretionary Discretionary Spending

Visit us at www.valuentum.com

Chipotle CMG FAIRLY VALUED Estimated Fair Value Fair Value Range Investment Style Sector

996.00

1,096.00

1,196.00

1,296.00

1,396.00

1,496.00

1,596.00

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

Valuentum Retail Equity Research (10=best) Data as of 15-Apr-2021


Highest Rated

Economic Profit Analysis

ValueCreation™ EXCELLENT Return on Invested Capital (ROIC)

ROIC - WACC Spread, 3-year historical average 30.6%ROIC - WACC Spread, 5-year projected average 174.7%These spreads equal the firm's annual average ROIC (excluding goodwill) less its WACC.

ValueTrend™ NEGATIVE

Weighted Average Cost of Capital (WACC) The graph above shows the firm's ROIC (excluding goodwill) compared with historical averages and its WACC.

ROIC CalculationFiscal Year End: Dec-18 Dec-19 Dec-20

Earnings before InterestOperating Income after Depreciation 334 478 336- Adjusted Taxes (at 20% of EBIT) 67 96 67+ Amortization 0 164 185+ Non-cash Operating Items 129 -5 -116- Minority Interest 0 0 0Earnings before Interest 396 541 338

Cost of Equity Invested CapitalRisk Free Rate Assumption Inventories 22 26 26Fundamental Beta (ERP multiplier) + Receivables 62 108 387Estimated Equity Risk Premium + Current Deferred Income Taxes 0 0 0Cost of Equity Assumption + Other Current Assets 54 57 55

+ Property, Plant and Equipment, Net 1,379 1,459 1,584After-tax Cost of Debt + Goodwill, Net (Cost in Excess) 22 22 22Risk Free Rate Assumption + Intangibles 0 0 0Synthetic Credit Spread + Non Current Deferred Income Taxes 0 0 0Cost of Debt Assumption - Accounts Payable 113 116 121Cash Tax Rate Assumption - Other Current Liabilities 261 283 368After-tax Cost of Debt Assumption

Invested Capital, with goodwill 1,165 1,273 1,585Cost of Preferred Stock Invested Capital, without goodwill 1,143 1,251 1,563Preferred DividendsValue of Preferred Stock Return on Invested Capital, with goodwill 35.2% 51.7% 29.9%Cost of Preferred Assumption Return on Invested Capital, without goodwill 35.9% 52.8% 30.5%

In Millions of USD

Weighted Average Cost of Capital (WACC)ERP = Equity Risk Premium

Note: Valuentum may provide an adjusted ROIC measure to better reflect the economic substance of a company's operations, as in the case of companies with negative invested capital.


20.0%NA

00

NA

9.2%

0.86.5%9.2%

4.3%NANA

Chipotle receives a ValueTrend™ rating of NEGATIVE, which is based on thecompany's trailing three-year performance. The firm's ROIC (excluding goodwill) fellto 30.5% last year from its trailing 3-year average of 39.8%. We expect ROIC(excluding goodwill) to be in the ballpark of about 382% by the end of our discreteforecast period, with downside risk to about 235% over that time period.

---------- Actual ----------

4.3%

$1379.00 $965.00 - $1793.00 LARGE-CAP GROWTH Consumer Discretionary Discretionary Spending

The best measure of a firm's ability to create value for shareholders is expressed bycomparing its return on invested capital (ROIC) with its weighted average cost ofcapital (WACC). The gap or difference between ROIC and WACC is called the firm'seconomic profit spread. Chipotle's 3-year historical return on invested capital (withoutgoodwill) is 39.8%, which is above the estimate of its cost of capital of 9.2%. As such,we assign the firm a ValueCreation™ rating of EXCELLENT. In the chart to the right,we show the probable path of ROIC in the years ahead based on the estimated volatilityof key drivers behind the measure. The solid grey line reflects the most likely outcome,in our opinion, and represents the scenario that results in our fair value estimate.

Chipotle CMG FAIRLY VALUED Estimated Fair Value Fair Value Range Investment Style Sector Industry

529.7%

382.1%

35.9%52.8%

30.5%

234.5%

WACC, 9.2%0.0%

100.0%

200.0%

300.0%

400.0%

500.0%

600.0%

100.0%

0.0% Equity

Debt

Preferred

Capital Structure



Highest Rated

Growth Analysis

Revenue Growth AGGRESSIVE Projected Revenue (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

Revenue3-year Historical

CAGR5-year Projected

CAGRChipotle USD 5,985 10.2% 15.6%

Disney USD 65,388 5.8% 13.4%

Home Depot USD 110,225 5.2% 4.6%

McDonald's USD 18,865 -6.1% 9.6%

Nike USD 37,403 2.9% 10.0%

Peer Median 4.1% 9.8%

Industry Median 4.0% 6.2%

In the chart above, we show our baseline forecast for revenue as well as potential upside and downside cases.

EBITDA Growth Projected EBITDA (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

EBITDA3-year Historical

CAGR5-year Projected

CAGRChipotle USD 760 19.3% 31.8%

Disney USD 9,139 -18.1% 36.0%

Home Depot USD 17,832 5.0% 10.5%

McDonald's USD 8,957 -2.8% 15.3%

Nike USD 3,836 -11.1% 26.8%

Peer Median -7.0% 21.1%


In the chart above, we show our baseline forecast for EBITDA as well as potential upside and downside cases.

Net Income Growth Projected Net Income (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year Net Income

3-year Historical CAGR

5-year Projected CAGR

Chipotle USD 356 26.4% 39.4%

Disney USD -2,832 -168.3% -253.6%

Home Depot USD 11,242 12.2% 12.3%

McDonald's USD 4,731 -3.1% 19.0%

Nike USD 2,539 -15.7% 30.8%



In the chart above, we show our baseline forecast for net income as well as potential upside and downside cases.

Chipotle's EBITDA expansion has been greater than that of both its peer group andindustry group during the past three years. We expect the firm's EBITDA expansion tooutpace its peer group and industry group during the next five years. Disney sports thehighest expected EBITDA growth rate among peers.

Chipotle's net income expansion has been greater than that of both its peer group andindustry group during the past three years. We expect the firm's net income expansionto outpace its peer group and industry group during the next five years. Chipotle sportsthe highest expected net income growth rate among peers.



Chipotle's revenue expansion has been greater than the median of both its peer groupand industry group during the past three years. We expect the firm's revenue expansionto outpace the median of its peer group and industry group during the next five years.Our growth assessment of each firm is based on the firm's 5-year forward revenueCAGR. Chipotle's future pace of revenue growth is AGGRESSIVE, in our opinion.


4,8655,586 5,985

14,087

12,330

10,572

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

536855 760

3,926

3,020

2,114

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

177350 356

2,436

1,874

1,312

0

500

1,000

1,500

2,000

2,500

3,000



Highest Rated

Cash Flow and Financial Leverage AnalysisCash Flow Generation STRONG Financial Leverage LOW

The bars above show the firms operating cash flow, capital expenditures, and free cash flow, respectively. The bars above show the firm's annual debt-to-EBITDA. The red line shows the firm's normalized measure.

Cash Flow from Operations Projected Operating Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year CFO


5-year Projected CAGR

Chipotle USD 664 12.5% 31.6%

Disney USD 7,616 -14.9% 35.3%

Home Depot USD 13,723 11.9% 11.2%

McDonald's USD 6,265 4.1% 17.6%

Nike USD 2,485 -13.5% 35.2%



In the chart above, we show our baseline forecast for CFO as well as potential upside and downside cases.

Free Cash Flow (CFO-capital expenditures) Projected Free Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year FCF


5-year Projected CAGR Source: Company Filings, Valuentum Projections

Chipotle USD 291 5.2% 48.9%

Disney USD 3,594 -25.6% 49.7%

Home Depot USD 11,045 10.6% 13.6%

McDonald's USD 4,624 7.7% 19.6%

Nike USD 1,399 -20.1% 48.4%



In the chart above, we show our baseline forecast for free cash flow as well as potential upside and downside cases.

Chipotle's cash flow from operations expansion has been greater than that of both itspeer group and industry group during the past three years. We expect the firm's cashflow from operations expansion to outpace its peer group and industry group during thenext five years. Disney sports the highest expected cash flow from operations growthrate among peers.

Chipotle's free cash flow expansion has been greater than that of both its peer groupand industry group during the past three years. We expect the firm's free cash flowexpansion to outpace its peer group and industry group during the next five years.Disney sports the highest expected free cash flow growth rate among peers.



Firms that generate a free cash flow margin (free cash flow divided by total revenue)above 5% are usually considered cash cows. Chipotle's free cash flow margin hasaveraged about 6.2% during the past 3 years. As such, we think the firm's cash flowgeneration is relatively STRONG. The free cash flow measure shown above is derivedby taking cash flow from operations less capital expenditures and differs fromenterprise free cash flow (FCFF), which we use in deriving our fair value estimate forthe company. For more information on the differences between these two measures,please visit our website at Valuentum.com. At Chipotle, cash flow from operationsincreased about 7% from levels registered two years ago, while capital expendituresexpanded about 30% over the same time period.

Firms that exhibit high leverage tend to be more risky than firms with relatively lowdebt loads, all else equal. We measure financial leverage by taking a firm's currenttotal debt load and dividing it by the firm's trailing average 3-year annual EBITDA.Firms that are over 3 for this metric, we rate as having high leverage. Companies thathave less than 1.5 turns of leverage (or a measure below 1.5), we rate as having lowleverage. Chipotle's normalized debt-to-EBITDA measure of about 0 puts it in theLOW camp.


622

722664

287334

373335

388

291

Dec-18 Dec-19 Dec-20

Cash from Operations Capital Expenditures Free Cash Flow

Chipotle -normalized

leverage, 0.00

0

0.5

1

1.5

2

2.5

3

3.5

12/31/2018 12/31/2019 12/31/2020

Chipotle- annual leverage Chipotle - normalized leverageMedium Threshold HighThreshold

622 722 664

3,411

2,624

1,837

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

335 388 291

2,771

2,131

1,492

0

500

1,000

1,500

2,000

2,500

3,000



Highest Rated

Valuation Analysis

Valuation Assumptions Valuation BreakdownIn Millions of USD (except for per share items)

Revenue CAGR %Avg. EBIT Margin %Avg. Cash Tax Rate %Earnings Before Interest CAGR %Earnings Per Share CAGR %Free Cash Flow to the Firm CAGR %Earnings before interest = Net operating profits less adjusted taxes

Phase II --> III FCFF CAGR % 6.2% (II) 3% (III)Cost of Equity %After-tax Cost of Debt %Discount Rate (WACC) %Synthetic credit spread = 1.29%

Phase I Present ValuePhase II Present ValuePhase III Present ValueTotal Firm Value

Net Balance Sheet Impact

Total Equity ValueDiluted Shares OutstandingFair Value per Share

DCF Valuation Summary Enterprise Free Cash FlowFiscal Year End: 12/31/2018 12/31/2019 12/31/2020

396 541 338202 213 239287 334 373-36 26 189

- Acquisitions 0 0 0347 395 15

In Millions of USD

Source: Company Filings, Valuentum Projections

Company NameValuentum Buying

Index™Forward Price-to-

Earnings

Price/Earnings-to-Growth (PEG), 5-

yearEV/Est. Normal

EBITDA

5-year Forward Earnings per Share CAGR

3-year Hist Avg ROIC, without

goodwillDividend Yield

%

Stock Price / Fair Value Estimate

Chipotle 6 65.5 3.1 20.4 39.6% 39.8% 0.0% 111.8%

Disney 3 89.8 NMF 13.5 -250.9% 15.0% 0.0% 97.9%

Home Depot 7 22.9 1.9 14.1 14.5% 50.7% 2.1% 106.7%

McDonald's 6 27.1 1.7 14.5 21.4% 28.4% 2.2% 109.4%

Nike 5 52.8 2.5 23.3 32.1% 34.2% 0.8% 104.9%

Peer Median 5.5 40.0 NMF 14.3 18.0% 31.3% 1.4% 105.8%

Industry Median 6.0 26.4 2.0 13.0 12.3% 34.2% 1.0% 106.5%

View back of report for a full list of industry constituents covered by Valuentum. VBI: Valuentum's ranking for the attractiveness of this investment at the date of the report.


29.5 39.0

22.3 24.5

19.2 18.1

25.4 30.5

18.2 16.6

19.1 18.6

Company Metrics versus Peer and Industry Medians

P/E on Est. Normal Diluted EPS Forward EV/EBITDA

35.7 32.7

In Millions of USD

---------- Actual ----------

We think Chipotle is worth $1379 per share with a fair value range of $965.00 -$1793.00. The margin of safety around our fair value estimate is driven by the firm'sMEDIUM ValueRisk™ rating, which is derived from an evaluation of the historicalvolatility of key valuation drivers and a future assessment of them. Our near-termoperating forecasts, including revenue and earnings, do not differ much from consensusestimates or management guidance. Our model reflects a compound annual revenuegrowth rate of 15.6% during the next five years, a pace that is higher than the firm's 3-year historical compound annual growth rate of 10.2%. Our model reflects a 5-yearprojected average operating margin of 15.3%, which is above Chipotle's trailing 3-yearaverage. Beyond year 5, we assume free cash flow will grow at an annual rate of 6.2%for the next 15 years and 3% in perpetuity. For Chipotle, we use a 9.2% weightedaverage cost of capital to discount future free cash flows.

Earnings before Interest+ Depreciation - Capital Expenditures - Change in Working Capital

Enterprise Free Cash Flow (FCFF)

Our future forecasts for key valuation drivers result in a future free enterprise cashflow stream. Above, we show how we calculate enterprise free cash flow and thehistorical performance of the metric for Chipotle. Over the next five years, we expectthe firm's enterprise free cash flow to expand at about a 170% compound annualgrowth rate. During years 6 through 20, we expect the measure to grow at a 6.2%rate. Beyond year 20 (in perpetuity), we grow the firm's free cash flow at inflation(3%).

952

39,17228.4

$1,379.00

18,07715,01338,220

9.2%Results5,131

43.6%39.6%

170.2%Long-term Projections

9.2%NA


5-year Projections In the chart below, we show the build up to our estimate of total enterprise value forChipotle and the break down to the firm's total equity value, which we estimate to beabout 39.17USD billion. The present value of the enterprise free cash flows generatedduring each phase of our model and the net balance sheet impact is displayed. Wedivide total equity value by diluted shares outstanding to arrive at our $1379 pershare fair value estimate.

15.6%15.3%20.0%


5,131

18,077

15,013

952

39,172

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Yr 1-5 Yr 6-20 Perpetuity Net Balance SheetImpact

Equity Value



Highest Rated

Margin of Safety Analysis

Range of Potential Outcomes ValueRisk™ MEDIUM

Revenue Volatility 11.4%Gross Margin Volatility 16.0%Earnings (EBI) Volatility 30.9%Cash Flow (FCFF) Volatility Greater than 50%Fair Value Range 30.0%The Fair Value Range sets the premium or discount on our estimate of the firm's fair value.

Upside and Downside ProbabilitiesProbability (fair value < $0) Less than 0.1%Probability (fair value > 2x current share price) 0.00%

Future Path of Fair Value

The graph above shows the expected future fair value of the firm's shares relative to its current stock price.

Our discounted cash flow process values each firm on the basis of the present value ofall future free cash flows. Although we estimate the firm's fair value at about $1379 pershare, every company has a range of probable fair values that's created by theuncertainty of key valuation drivers (like future revenue or earnings, for example). After all, if the future were known with certainty, we wouldn't see much volatility in themarkets as stocks would trade precisely at their known fair values. Our ValueRisk™rating sets the margin of safety or the fair value range we assign to each stock. In thegraph above, we show this probable range of fair values for Chipotle. We think the firmis attractive below $965 per share (the green line), but quite expensive above $1793 pershare (the red line). The prices that fall along the yellow line, which includes our fairvalue estimate, represent a reasonable valuation for the firm, in our opinion.

We strive to answer a few questions that investors often ask: 1) What are the chancesof a total loss of investment in this company? and 2) What is the chance that thecompany is really worth twice what I paid for it? The probability (fair value < 0)strives to answer the first question. It indicates the chance that the firm mayencounter insolvency based on the characteristics of its cash flow stream, capitalstructure, and risk profile. The probability (fair value > 2x current share price) strivesto answer the second question. It is our best estimate of whether investors areparticipating in a half-off sale by buying the company's shares at current prices.

We estimate Chipotle's fair value at this point in time to be about $1379 per share. Astime passes, however, companies generate cash flow and pay out cash to shareholdersin the form of dividends. The chart to the right compares the firm's current share pricewith the path of Chipotle's expected equity value per share over the next three years,assuming our long-term projections prove accurate. The range between the resultingdownside fair value and upside fair value in Year 3 represents our best estimate of thevalue of the firm's shares three years hence. This range of potential outcomes is alsosubject to change over time, should our views on the firm's future cash flow potentialchange. The expected fair value of $1795 per share in Year 3 represents our existingfair value per share of $1379 increased at an annual rate of the firm's cost of equity lessits dividend yield. The upside and downside ranges are derived in the same way, butfrom the upper and lower bounds of our fair value estimate range.



Chipotle receives a ValueRisk™ rating of MEDIUM based of the historical volatilityof key drivers of economic value creation. The fair value range sets the margin ofsafety around our fair value estimate of the firm's shares.


$965

$1,379

$1,793

-500 0 500 1000 1500 2000 2500 3000 3500

$2,334

$1,795Current Share Price, $1,542

$1,256

$0

$500

$1,000

$1,500

$2,000

$2,500

Current Share Price Yr 1 Fair Value Yr 2 Fair Value Yr 3 Fair Value



Highest Rated

Technical Analysis

Technical Evaluation BULLISH Money Flow Index (MFI) NEUTRAL

30-week Price and Volume Chart (weekly)Relative Price Strength WEAK

5-week Company Performance 7.3%5-week Market Benchmark Performance 1.4%5-week Relative Performance vs. Market Benchmark 5.9%13-week Company Performance 2.6%13-week Market Benchmark Performance 5.6%13-week Relative Performance vs. Market Benchmark -3.0%30-week Company Performance 22.1%30-week Market Benchmark Performance 12.0%30-week Relative Performance vs. Market Benchmark 10.1%

Upside/Downside Volume DETERIORATING Timeliness Matrix™ Equity Valuation

Relative Strength

Firms that are undervalued and currently showing near-term pricing strength score near the top right of the matrix.


Weak 1Companies that are undervalued and showing near-term relative price strength couldrepresent timely buys, as the stock may be attractive to both value and momentuminvestors. A cross section of the firm's equity valuation and its relative share pricestrength is shown in the matrix above. We tend to prefer undervalued stocks that have strong pricing momentum, also called Valuentum stocks.

The level and trend of the Upside/Downside (U/D) volume ratio reveals whetherinstitutional participation has been bullish or bearish as of late. Although Chipotle'sU/D volume ratio of 1.2 is greater than 1, it resides below its trailing average,indicating bullish but DETERIORATING institutional interest during the past severalweeks.

Strong

Neutral

The firm's near-term moving average (5-week, grey line) and medium-term movingaverage (13-week, red line) are shown in the chart above. Typically, when a shorter-term moving average crosses a medium- or longer-term moving average from below, itrepresents a bullish signal. If the short-term moving average crosses from above, tradersoften view this as bearish. Chipotle's 5-week moving average resides above its 13-weekmeasure, indicating a BULLISH trend. We'd grow wary of the firm's technicals shouldits 5-week moving average drop below its 13-week moving average, as the firm's 30-week uptrend could be threatened if this occurs.

The Money Flow Index (MFI) is an oscillator that uses price and volume to measurebuying and selling pressure. Chartists often look for overbought (above 80) andoversold (below 20) levels to warn of unsustainable near-term price extremes.Chipotle's MFI of 61 is neutral, suggesting the firm's stock is neither overbought noroversold at this time. However, a score over 50 tends to favor bulls. The MFI can alsobe used to gauge the strength or weakness of a firm's price trend. In Chipotle's case,its stock price and money flow neither reveals a bullish nor bearish divergence,further supporting our neutral view on its money flow action.

A firm's relative price strength can be assessed over any number of time horizons. Weshow the firm's performance over the past 5 weeks, 13 weeks, and 30 weeks below.In arriving at our relative strength rating for each company, we assess the past 13weeks, which includes the market's reaction to the firm's most recently reportedquarter, where applicable, and other more recent economic events. During the past 13weeks, Chipotle's shares returned 2.6%, while the market benchmark returned 5.6%.We think Chipotle's 13-week relative price performance is WEAK.

In the chart above, we pinpoint the heaviest accumulation or distribution week of thefirm, determined by the week with the highest trading volume during the past 30 weeks.A heavy accumulation (buying) or distribution (selling) week often determines thefuture near-term direction of the firm's share price, as money managers continue tomove in or out of the stock in the days and weeks ahead driving the stock up or down,respectively. For Chipotle, the week with the highest trading volume out of the last 30weeks was a week of heavy selling, or distribution (red bar). Such market activity couldindicate a reversal of an uptrend or further confirmation of a downtrend.

Overvalued Fairly Valued Undervalued

Estimated Fair Value Fair Value Range Investment Style Sector Industry $1379.00 $965.00 - $1793.00 LARGE-CAP GROWTH Consumer Discretionary Discretionary Spending

Chipotle CMG FAIRLY VALUED

996

1,096

1,196

1,296

1,396

1,496

1,596

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,000

5-week Moving Average

13-week Moving Average

Stock Price

1,1801,2301,2801,3301,3801,4301,4801,5301,5801,630

Overbought Line

Oversold Line

5561

0102030405060708090

1.1 1.2Average, 1.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

- 10-week Moving Average



Highest Rated

Pro Forma Income Statement -------------------- Historical --------------------

In Millions of USD (except for per share items)Dec-18 Dec-20

Total Revenue 4,865 5,985

Cost of Goods Sold 3,954 4,944

Selling, General and Administrative Expenses 375 466

Other Operating Expenses 202 239

Operating Income 334 336

Unusual items 0 0

Operating Income, including unusual items 334 336

Interest Expense 0 0

Other Non-operating Income (65) (42)

Pre-tax Income 268 294

Income Taxes 92 (62)

Income after tax 177 356

Minority Interest and Equity Income 0 0

Net Income, excluding extra items 177 356

Income Available to Common, excluding extra items 177 356

Diluted Earnings per Share, excluding extra items 6.31 12.53

Diluted Weighted Shares Outstanding 28.0 28.4

Source: Company Filings, Xignite, Valuentum Projections

Note: Pro forma data in discounted cash-flow valuation may reflect significant adjustments from GAAP accounting data, including cash (not effective) tax rates and other analytical adjustments on a backward-looking and forward-looking basis. No individual data, by itself, found in this report should be used to make any investment decision.

28.3 28.4 28.3


12.37 23.55 31.13

350 668 882

350 668 882

0 0 0

350 668 882

108 167 220

458 835 1,102

(20) 0 0

0 0 0

0 0 0

478 835 1,102

478 835 1,102

212 272 300

4,444 5,623 6,196

452 530 584

5,586 7,260 8,182



---------- Projected ----------




Highest Rated

Pro Forma Balance Sheet -------------------- Historical --------------------


AssetsTotal Cash (including marketable securities) 677 952Inventory 22 26Accounts Receivable 62 387Other Current Assets 54 55Total Current Assets 815 1,420

Gross Fixed Assets 2,463 2,964(Accumulated Depreciation) (1,084) (1,380)Net Property, Plant, and Equipment 1,379 1,584

Goodwill, Net 22 22Intangibles, Net 0 0Other Long-term Assets 50 2,957Total Assets 2,266 5,983

LiabilitiesAccounts Payable 113 121Other Current Liabilities 337 701Current Portion of Long-term Debt 0 0Total Current Liabilities 450 822

Long-term Debt 0 0Other Long-term Liabilities 374 3,141Total Liabilities 824 3,963

Preferred Stock 0 0

Shareholders' EquityCommon Stock and Additional Paid in Capital 1,375 1,550Retained Earnings 2,574 3,276Other Equity (2,507) (2,806)Total Shareholders' Equity 1,441 2,020

Total Liabilities and Shareholders' Equity 2,266 5,983




5,105 6,679 7,560

(2,704) (2,876) (2,946)1,683 2,618 3,430

1,466 1,550 1,5502,921 3,944 4,826

0 0 0

3,422 4,061 4,130

0 0 02,755 3,141 3,141

667 920 989

551 782 8360 0 0

116 138 153

5,105 6,679 7,560

0 (185) (370)2,552 2,957 2,957

1,459 1,704 1,821

22 22 22

2,660 3,374 3,817(1,201) (1,670) (1,997)

57 55 551,072 2,181 3,130

26 30 33108 442 467

881 1,654 2,575

---------- Projected ----------


Estimated Fair Value Fair Value Range Investment Style Sector Industry $1379.00 $965.00 - $1793.00 LARGE-CAP GROWTH Consumer Discretionary Discretionary Spending

Chipotle CMG FAIRLY VALUED



Highest Rated

Pro Forma Cash Flow Statement -------------------- Historical --------------------


Cash from OperationsNet Income 177 356Depreciation and Amortization 202 424Deferred Income Taxes 11 0Operating Gains Or Losses 129 (116)Changes in Working Capital 104 0

Cash Flow from Operations 622 664

Cash from InvestingPurchase of Property, Plant, Equipment (287) (373)Other Investing Cash Flows (100) (60)Cash Flow from Investing (388) (433)

Cash from FinancingIssuance (Retirement) of Stock (161) (54)Issuance (Retirement) of Debt 0 0Dividends Paid 0 0Other Financing Cash Flows (6) (51)Cash Flow from Financing (167) (105)

Foreign Exchange (1) 1

Net Change in Cash 66 127




0 0 0

228 702 921

(202) (70) (70)

0 0 0(11) 0 0

(191) (70) (70)0 0 0

(292) (410) (443)

(334) (410) (443)42 0 0

722 1,182 1,434

(5) 0 00 39 40

377 475 5120 0 0

350 668 882



---------- Projected ----------




Highest Rated

Discretionary SpendingDiscretionary Spending FAIRLY VALUED

Company Name TickerMarket Cap (USD-

mil) DCF Valuation ValueCreation™ ValueRisk™ ValueTrend™ Technicals Relative Strength

Activision ATVI 60,500 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BEARISH WEAK

Best Buy BBY 30,695 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH STRONG

Cracker Barrel CBRL 2,785 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BEARISH NEUTRAL

Chipotle CMG 43,829 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH WEAK

Disney DIS 336,320 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE VERY BEARISH STRONG

Dollar General DG 55,360 FAIRLY VALUED EXCELLENT LOW POSITIVE NEUTRAL NEUTRAL

Dollar Tree DLTR 21,578 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BEARISH WEAK

Domino's Pizza DPZ 15,578 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH WEAK

Estee Lauder EL 81,261 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH NEUTRAL

Ford F 39,359 FAIRLY VALUED POOR VERY HIGH POSITIVE BULLISH STRONG

General Motors GM 71,907 FAIRLY VALUED POOR MEDIUM NEGATIVE BULLISH STRONG

Hasbro HAS 10,913 FAIRLY VALUED EXCELLENT LOW NEGATIVE BULLISH NEUTRAL

Home Depot HD 310,221 FAIRLY VALUED EXCELLENT LOW NEGATIVE BULLISH WEAK

Lowe's LOW 131,070 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH STRONG

McDonald's MCD 173,101 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH STRONG

Netflix NFLX 241,541 FAIRLY VALUED POOR HIGH POSITIVE BULLISH WEAK

Nike NKE 207,003 FAIRLY VALUED EXCELLENT LOW NEGATIVE NEUTRAL STRONG

Starbucks SBUX 137,651 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH STRONG

Tesla TSLA 777,437 OVERVALUED POOR HIGH POSITIVE NEUTRAL STRONG

Yum! Brands YUM 29,384 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE VERY BULLISH WEAK

Dick's Sporting DKS 5,254 FAIRLY VALUED GOOD LOW NEGATIVE VERY BULLISH STRONG

Ross Stores ROST 39,564 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH STRONG

TJX Cos TJX 77,541 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH STRONG

Whirlpool WHR 11,817 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BEARISH NEUTRAL

CarMax KMX 16,098 FAIRLY VALUED VERY POOR MEDIUM NEGATIVE BULLISH WEAK

AutoZone AZO 28,011 FAIRLY VALUED EXCELLENT LOW POSITIVE VERY BULLISH WEAK

Ralph Lauren RL 7,372 FAIRLY VALUED EXCELLENT LOW NEGATIVE BULLISH STRONG

Ulta Salon ULTA 15,369 FAIRLY VALUED EXCELLENT LOW POSITIVE BULLISH STRONG

Leggett & Platt LEG 5,645 FAIRLY VALUED EXCELLENT LOW NEGATIVE BEARISH WEAK

Genuine Parts GPC 14,360 FAIRLY VALUED EXCELLENT LOW NEGATIVE BULLISH NEUTRAL

VF Corp VFC 33,927 FAIRLY VALUED EXCELLENT LOW NEGATIVE BULLISH STRONG

Cintas Corp CTAS 38,800 OVERVALUED EXCELLENT LOW NEGATIVE BULLISH STRONG

Williams-Sonoma WSM 14,906 FAIRLY VALUED EXCELLENT LOW NEGATIVE NEUTRAL STRONG

MID-CAP VALUE ATTRACTIVE

LARGE-CAP CORE NEUTRAL

LARGE-CAP VALUE NEUTRAL





MID-CAP VALUE NEUTRAL



LARGE-CAP VALUE ATTRACTIVE

LARGE-CAP VALUE ATTRACTIVE

LARGE-CAP CORE ATTRACTIVE

MID-CAP VALUE NEUTRAL

LARGE-CAP GROWTH NEUTRAL

MEGA-CAP GROWTH UNATTRACTIVE








MEGA-CAP CORE ATTRACTIVE


LARGE-CAP CORE UNATTRACTIVE


MEGA-CAP BLEND UNATTRACTIVE




MID-CAP CORE NEUTRAL


The above bar chart reveals the price/fair value of the company, its peers, and the industry as a whole.Shaded blue denotes that the firm has earned the highest rating for that respective category.Investment Style Relative Valuation

LARGE-CAP CORE UNATTRACTIVE


We think the Discretionary Spending industry is fairly valued at this time. Theindustry's market cap is trading between 80% and 120% of our estimate of its fair valuebased on our DCF process. Although we use a firm-specific ValueRisk™ measure todetermine whether a firm is undervalued or overvalued based on our DCF process, weconsider an industry to be undervalued if it is trading below 80% of our estimate of itsfair value and overvalued if it is trading at over 120% of our estimate of its fair value.We think these fair value ranges are appropriate given the diversification benefits ofholding a basket of stocks. Although there may be individual opportunities within theDiscretionary Spending industry, we don't find the industry as a whole attractive basedsolely on valuation.


111.8%

105.8%106.5%

102%103%104%105%106%107%108%109%110%111%112%113%

Chipotle Peer Median Discretionary Spending

Valuentum's Full Page Stock Report


BA

G

I

N

C

J

D

M

H

E

L

K

A DCF ValuationShows whether the firm is undervalued, fairly valued, or overvalued based on our DCF process and by how much.

B Valuentum Buying Index (VBI)Provides insight into the timeliness of an investment opportunity. We rank firms from 1 to 10 based on rigorous fiancial, valuation, and technical analysis. A 10 represents one of our top picks.

C Valuentum Value Rating (VVR) Indicates whether we think a firm is undervalued, fairly valued, or overvalued on the basis of our DCF process.

D Investment ConsiderationsEvaluates firms on 12 different measures, from the firm's growth and cash flow generation to the stock's money flow index and upside/downside volume. We reveal technical support and resistance levels.

E 30-week Price and Volume ActionDisplays the last accumulation or distribution week of the stock and historical price and volume action.

G Company VitalsShows sector,industry and other relevant company information.

H Business QualitySummary of the firm's ability to create value for shareholders compared wth the underlying risk of its operations.

I Normalized EPS and EBITDAEstimation of the firm's normalized earnings measures and the corresponding valuation mutliples.

J Investment HighlightsOur opinion of the company, including analysis of its financial and technical strengths and weaknesses.

K Relative ValuationComparison of the firm's PE, PEG, and Price/FV ratios versus peers.

L Returns Summary3-year averages of the firm's key return measures, including return on invested capital, with and without goodwill.

M Leverage, Coverage, and LiquidityA snapshot of the company's financial health.

N Financial SummaryA summary of the proforma financial statements found in the extended report.

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

UNDERVALUED

FAIRLY VALUED

OVERVALUED

• Revenue Volatility • Margin Volatility • Earnings Volatility • Cash Flow Volatility

About Valuentum

@Valuentum, we strive to stand out from the crowd. Mostinvestment research publishers fall into a few camps,whether it be value, growth, income, momentum, chartistor some variant of the aforementioned. We think each inits own right holds merit, but we think the combination ofthese approaches can be even more powerful. After all,stock price movements aren’t just driven by investors ofthe value or growth variety, but by all market participants.Therefore, we look at stocks from a variety of investmentperspectives in order to better understand and identifyideas. We want to provide relevant information.

The core of our process is grounded in rigorous discountedcash flow analysis and incorporates the concept of amargin of safety. We offer a fair value estimate for eachcompany and provide a relative valuation assessment inthe context of a company’s industry and closest peers. Across section of our ValueCreation™ and ValueRisk™ratings provides a financial assessment of a company’sbusiness quality, while our ValueTrend™ rating offersinsight into the trajectory of a firm’s economic profitcreation. The Economic Castle rating measures themagnitude of future economic value generation, and theDividend Cushion ratio assesses the financial capacity of acompany to keep raising its dividend.

Our analysis doesn’t stop there. We also offer a technicalevaluation of the stock as well as other momentumindicators. We not only want to reveal to readers whichfirms may be undervalued, in our view, but we also wantto provide readers with information to help them assessentry and exit points. Most research publishers focus onarriving at a target price or fair value estimate, but mayfall short of providing a technical assessment to bolsterbuy and sell disciplines. We strive to go the distance andprovide readers with answers--not half the story.

An explanation of our approach would not be complete ifwe didn’t describe our ideal stock idea. We’re lookingfor companies that are undervalued--both on a DCF basisand versus peers--have strong growth potential, have asolid track record of creating economic profits forshareholders with reasonable risk, are strong cash flowgenerators, have manageable financial leverage, and arecurrently showing bullish technical and momentumindicators. For dividend growth ideas, we look forcompanies that have both the capacity and willingness tokeep raising the dividend.

Can such stock ideas exist? Subscribe to Valuentum toreceive our best investment ideas and analysis onhundreds of stocks, dividends, ETFs and more.

Historical firm-specific financial data generates our ValueCreation™, ValueRisk™, and ValueTrend™ ratings. The data provides the basis for our financial forecasts. Full annual forecasts of income statement, balance sheet, and cash flow statement items. Firm-specific cost of equity, cost of debt, weighted average cost of capital, and long-term growth and profitability measures estimated.

A complete three-stage free cash flow to the firm valuation model generates an estimate of the firm's equity value per share based on estimated future free cash flows.The volatility of key valuation drivers are estimated and a margin of safety is determined.

The firm's stock price is compared to the suggested margin of safety. If a firm's stock price falls below the lower bound of our estimated fair value range, it receives Valuentum's highest Value Rating.


Financial Forecasts

Financial Statement Analysis

Discounted Cash Flow Valuation

ModelValueRisk™

Rating

Valuentum Value Rating (VVR)

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

Methodology for Picking Stocks - Valuentum Buying Index™ (VBI)

@ Valuentum, we like to look at companies from anumber of different perspectives. The Valuentum BuyingIndex (VBI) combines rigorous financial and valuationanalysis with an evaluation of a stock's technicals to derivea rating between 1 and 10 for each company. The VBIplaces considerable emphasis on a company's discountedcash-flow (DCF) valuation, its relative valuation versuspeers (both forward PE and PEG ratios), and its technicalsin order to help readers assess entry and exit points on themost interesting ideas.

Let's follow the red line on the flow chart below to seehow a company can score a 10, the best mark on the index(a "Top Pick"). First, the company would need to be'undervalued' on a DCF basis and 'attractive' on a relativevalue basis. The stock would also have to be exhibiting

'bullish' technicals. The firm would need aValueCreation™ rating of 'good' or 'excellent', exhibit'high' or 'aggressive' growth prospects, and generate atleast a 'medium' or 'neutral' assessment for cash flowgeneration, financial leverage, and relative price strength.

This is a tall order for any company. Stocks that don'tmake the cut for a 10 are ranked accordingly, with theleast attractive stocks, in our opinion, garnering a ratingof 1 ("We'd sell"). Most of our coverage universeregisters ratings between 3 and 7, but at any given timethere could be large number of companies garneringeither very high or very low scores, especially at marketlows or tops, respectively.

The Best Ideas Newsletter portfolio puts the VBI intopractice.

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

DCF FairlyValued

DCF Undervalued

Relative ValueUnattractive/Neutral

Relative Value Attractive

Relative ValueUnattractive/Neutral


Technicals Bearish: 1

Technicals Neutral: 2

TechnicalsBullish: 4

Technicals Bullish: 7

TechnicalsBearish: 6

Technicals >= BullishValueCreation(TM) >= GoodGrowth >= HighCash Flow Generation >= MediumFinancial Leverage <= MediumRelative Strength >= Neutral

Final Score: 10



TechnicalsBearish: 3

Relative Value Unattractive/Neutral











Initial Index Score

DCF Overvalued

ValueRisk™. This is a proprietary Valuentum measure. ValueRisk™ indicates thehistorical volatility of key valuation drivers, including revenue, gross margin, earningsbefore interest, and enterprise free cash flow. The standard deviation of each measure iscalculated and scaled against last year's measure to arrive at a percentage deviation foreach item. These percentage deviations are weighted equally to arrive at thecorresponding fair value range for each stock, measured in percentage terms. The firm'sperformance is measured along the scale of LOW, MEDIUM, HIGH, and VERY HIGH.The ValueRisk™ rating for each firm also determines the fundamental beta of eachfirm along the following scale: LOW (0.85), MEDIUM (1), HIGH (1.15), VERY HIGH(1.3).

Range of Potential Outcomes. The firm's margin of safety is shown in the graphicof a normal distribution. We consider a firm to be undervalued if its stock price fallsalong the green line and overvalued if the stock price falls along the red line. Weconsider the firm to be fairly valued if its stock price falls along the yellow line.

Return on Invested Capital. At Valuentum, we place considerable emphasis onreturn on invested capital (both with and without goodwill). The measure focuses onthe return (earnings) the company is generating on its operating assets and is superiorto return on equity and return on assets, which can be skewed by a firm's leverage orexcess cash balance, respectively. ValueTrend™. This is a proprietary Valuentum measure. ValueTrend™ indicates the

trajectory of the firm's return on invested capital (ROIC). Firms that earned an ROIClast year that was greater than the 3-year average of the measure earn a POSITIVErating. Firms that earned an ROIC last year that was less than the 3-year average of themeasure earn a NEGATIVE rating.

Technical Evaluation. We evaluate a firm's near-term and medium-term movingaverages and money flow index (MFI) to assign each firm a rating along thefollowing scale: VERY BULLISH, BULLISH, NEUTRAL, BEARISH, and VERYBEARISH.

Cash Flow Generation. Firms' cash flow generation capacity are measured along thescale of STRONG, MEDIUM, and WEAK. A firm with a 3-year historical free cashflow margin (free cash flow divided by sales) greater than 5% receives a STRONGrating, while firms earning less than 1% of sales as free cash flow receive a WEAKrating.

Stock Price Relative Strength. We assess the perfomance of the company's stockduring the past quarter, 13 weeks, relative to an ETF that mirrors the aggregateperformance of constituents of the stock market. Firms are measured along the scaleof STRONG, NEUTRAL, and WEAK. Companies that have outperformed themarket index by more than 2.5% during this 13-week period receive a STRONGrating, while firms that trailed the market index by more than 2.5% during this 13-week period receive a WEAK rating.

Financial Leverage. Based on the firm's normalized debt-to-EBITDA metric, we rank firms on the following scale: LOW, MEDIUM, and HIGH. Companies with a normalized debt-to-EBITDA ratio below 1.5 receive a LOW score, while those with a measure above 3 receive a HIGH score.

Money Flow Index (MFI). The MFI is a technical indicator that measures buyingand selling pressure based on both price and volume. Traders typically use thismeasure to identify potential reversals with overbought and oversold levels. We use a14-week measure to rank firms along the following scale: EXTREMELYOVERBOUGHT (>90), OVERBOUGHT (80-90), NEUTRAL (20-80), OVERSOLD(10-20), EXTREMELY OVERSOLD (0-10).

Upside/Downside Volume. Heavy volume on up days and lower volume on down days suggests that institutions are heavily participating in a stock's upward advance. We use the trailing 14-week average of upside and downside volume to calculate an informative ratio. We rank each firm's U/D volume ratio along the following scale: BULLISH, IMPROVING, DETERIORATING, and BEARISH.

GlossaryEstimated Fair Value. This measure is our opinion of the fair equity value per share ofthe company. If our forecasts prove accurate, which may not always be the case, wemay expect a firm's stock price to converge to this value within the next 3 years.

Investment Style. Valuentum uses its own proprietary stock-classification system.Nano-cap: Less than $50 million; Micro-cap: Between $50 million and $200 million;Small-cap: Between $200 million and $2 billion; Mid-cap: Between $2 billion and$10 billion; Large-cap: Between $10 billion and $200 billion; Mega-cap: Over $200billion. Blend: Firm's that we think are undervalued and exhibit high growthprospects (growth in excess of three times the rate of assumed inflation). Value:Firm's that we believe are undervalued, but do not exhibit high growth prospects.Growth: Firms that are not undervalued, in our opinion, but exhibit high growthprospects. Core: Firms that are neither undervalued nor exhibit high growthprospects.

Fair Value Range. The fair value range represents an upper bound and lower bound,between which we would consider the firm to be fairly valued. The range considers ourestimate of the firm's fair value and the margin of safety suggested by the volatility ofkey valuation drivers, including revenue, gross margin, earnings before interest, andenterprise free cash flow (the determinants behind our ValueRisk™ rating).

DCF Valuation. We opine on the firm's valuation based on our DCF process. Firmsthat are trading with an appropriate discount to our fair value estimate receive anUNDERVALUED rating. Firms that are trading within our fair value range receive aFAIRLY VALUED rating, while firms that are trading above the upper bound of ourfair value range receive an OVERVALUED rating.

Company Vitals. In this section, we list key financial information and the sector andindustry that Valuentum assigns to the stock. The P/E-Growth (5-yr), or PEG ratio,divides the current share price by last year's earnings (EPS) and then divides thatquotient by our estimate of the firm's 5-year EPS growth rate. The estimatednormalized diluted EPS and estimated normalized EBITDA represent the five-yearforward average of these measures used in our discounted cash flow model. The P/Eon estimated normalized EPS divides the current share price by estimated normalizeddiluted EPS. The EV/estimated normalized EBITDA considers the current enterprisevalue of the company and divides it by estimated normalized EBITDA. EV is definedas the firm's market capitalization plus total debt, minority interest, preferred stockless cash and cash equivalents.

Relative Value. We compare the firm's forward price-to earnings (PE) ratio and itsprice/earnings-to-growth (PEG) ratio to that of its peers. If both measures fall below thepeer median, the firm receives an ATTRACTIVE rating. If both are above the peermedian, the firm receives an UNATTRACTIVE rating. Any other combination resultsin a NEUTRAL rating.

ValueCreation™. This is a proprietary Valuentum measure. ValueCreation™indicates the firm's historical track record in creating economic value for shareholders,taking the average difference between ROIC (without goodwill) and the firm'sestimated WACC during the past three years. The firm's performance is measured alongthe scale of EXCELLENT, GOOD, POOR, and VERY POOR. Those firms withEXCELLENT ratings have a demonstrated track record of creating economic value,while those that register a VERY POOR mark have been destroying economic value.

Business Quality Matrix. We compare the firm's ValueCreation™ and ValueRisk™ratings. The box is an easy way for investors to quickly assess the business quality ofa company. Firms that generate economic profits with little operating variabilityscore near the top right of the matrix.

Timeliness Matrix. We compare the company's recent stock performance relative tothe market benchmark with our assessment of its valuation. Firms that areexperiencing near-term stock price outperformance and are undervalued by ourestimate may represent timely buys.

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

CMG Rating History Price Fair Value VBI15-Apr-21 $1,542.39 $1,379.00 67-Oct-20 $1,278.68 $1,178.00 617-Jul-20 $1,129.44 $1,016.00 518-Oct-19 $841.48 $688.00 58-Apr-19 $712.44 $581.00 53-Dec-18 $467.43 $469.00 620-Jul-18 $451.19 $459.00 526-Apr-18 $419.93 $453.00 69-Mar-18 $322.16 $372.00 63-Nov-17 $273.53 $350.00 325-Oct-17 $277.01 $350.00 328-Jul-17 $350.50 $445.00 317-Mar-17 $402.58 $484.00 317-Oct-16 $411.94 $498.00 3

Affiliate RelationshipCustomers of Valuentum acknowledge and agree that Valuentum’s affiliate, Pigeon Oak Capital Management, LLC (“Advisor”), may act as an investment advisor to other clients and receive fees for such services. The advice given and the actions taken with respect to such clients and Advisor’s own account may differ from opinions or the timing and nature of action taken with respect to Valuentum’s ratings or published research. Customers of Valuentum must further recognize that transactions in a specific security are not completed for Valuentum customers’ accounts because Valuentum does not have the authority to make trades or provide personalized advice for newsletter clients. The Advisor has discretion to make trades in its clients’ accounts without receiving prior authorization in each instance. Valuentum’s customers also acknowledge that in managing the Advisors’ clients’ assets, Advisor may purchase or sell securities in which Valuentum has an opposite opinion on, and Advisor, its members, officers, directors, or employees, directly or indirectly, have or may acquire a position or interest that contradicts that of Valuentum’s opinion. Due to the fiduciary relationship between Advisor and its clients, Valuentum’s customers will not receive alerts of trades done by Advisor, and trades done by Valuentum’s customers based on opinions of Valuentum might lag trades done by Advisor’s clients. Advisor or its affiliated persons may obtain material, nonpublic or other confidential information that, if disclosed, might affect an investor’s decision to buy, sell or hold a security. Under applicable law, Advisor or Valuentum and their affiliated persons cannot improperly disclose or use this information for their personal benefit or for the benefit of any person, including clients of Advisor or customers of Valuentum. If Advisor or any affiliated person obtains nonpublic or other confidential information about any issuer, Valuentum will have no obligation to disclose the information to customers of it, clients of Advisor or use it for their benefit.

The High Yield Dividend Newsletter portfolio, the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Any performance, including that in the Nelson Exclusive publication, is hypothetical and does not represent actual trading. Past performance is not a guarantee of future results.

Valuentum is an investment research publishing company.

Valuentum has not owned and does not own any shares of stocks mentioned on its website or in this report. President of Investment Research Brian Nelson does not own any shares of stocks mentioned on Valuentum's website or in this report. Majority share owner of Valuentum, Elizabeth Nelson, currently has exposure to HON in her retirement account.

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chipotle cmg fairly valued buying index™ 6 value rating

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