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Chipotle has appointed Taco Bell’s Brian Niccol to the top spot Chipotle Mexican Grill Inc., Taco Bell’s Brian Niccol is the helm, but they can not do that, but they can make it easier for them. Chipotle CMG, + 15.35% announced late Tuesday that Niccol would be filling the CEO vacancy, as CEO and founder Steve Ells moves to the executive chairman position. Shares shot up more than 10% after 15.3% on Wednesday to mark their biggest win in four and a half years. Niccol joined Taco Bell in 2011 and has been CEO since January 2015. Chipotle’s announcement Niccol’s leadership in bringing new business to Taco Bell and transforming its digital capabilities for both social media and mobile ordering. See also: Chipotle to invest $ 50 million on restaurant refresh program, which may not be enough
Before joining Taco Bell, he held positions at Pizza Hut, including chief marketing officer. Both Pizza Hut and Taco Bell are Yum Brands Inc. YUM, + 0.14% chains. BTIG analysts emphasized the differences between Taco Bell and Chipotle, from the business model (Taco Bell is largely franchised) and sales drivers, with Taco Bell focused on value and limited-time offers. But there is one important thing Niccol could bring with him. “We believe advertising is a key that Mr. Niccol could use from his Taco Bell experience, though Chipotle would have to do so much less ($ 106 million vs. about $ 415 million for Taco Bell last year),” BTIG Peter Saleh wrote in a review. BTIG has a neutral rating on Chipotle and Yum shares. Read: Here’s why Goldman Sachs thinks Winter Olympics are a risk to restaurants Chipotle has released a number of ads in recent months Scarecrow “Ad did a few years ago. (A version of the ad is available here .) “While a successful post-consumer campaign is needed, we have difficulty in finding a solution to the problem.” Chipotle’s current low single-digit trajectory , “Wrote Wedbush analysts led by Nick Setyan. Likewise, BTIG analysts do not see the new appointment leading to “any material change in fundamentals until at least 2019.” Wedbush is “unconvinced” that Niccol’s hiring is a good fit for Chipotle because of the differences in business model. “We expect to see inflation in 2018 and 1% -to-2% inflation, we continue to believe 2018 guidance of 17.5% -to-18.5% unit-level margins sets at high bar, “Wedbush wrote. “We are more likely to expect marketing spending of about 3% in 2018, and a similar estimate in 2019, with higher spending another potential risk to unit-level margins.” Do not miss: A cup of crypto: Starbucks and Dunkin ‘both discussed bitcoin in their analyst days Wedbush rates Chipotle shares with a $ 285 price target. SunTrust Robinson Humphrey analysts led by Jake Bartlett say the new hire “gives [them] greater confidence that it will be both aggressive and effective, driving an acceleration in same-store sales.” SunTrust rates Chipotle shares buy with a $ 340 price target. Chipotle shares are down nearly 31% for the last year while the S & P 500 index SPX, + 1.34% is up 15.5% for the period.