Chipotle's 2020 menu relaunch is appetizing says SunTrust Robinson Humphrey

The chain is expected to relaunch its 'Lifestyle' bowls in 2020

The recipe for Chipotle's success in 2020 lies in its menu innovation as the Mexican chain prepares to relaunch its "Lifestyle" bowls.

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"Our guess is that the new "Lifestyle" bowls will be promoted and offered online exclusively, but we believe employees have been trained to better handle in-store orders, which could open the door to in-store marketing of the bowls,"  said analyst Jake Bartlett, of SunTrust Robinson Humphrey, in a note to clients.

TickerSecurityLastChangeChange %
CMGCHIPOTLE MEXICAN GRILL INC.1,335.59-4.09-0.31%

While Bartlett is also anticipating a new salad blend with baby kale and baby spinach, it likely won't pack the same punch tied to the initial rollout last January.

“We do not expect the new salad mix and ‘Lifestyle Bowls’ to be as incremental as they were when first launched, or as carne asada has been, but we are encouraged by this early sign of continued menu innovation in ’20," he noted.

The menu evolution, which is tied to popular diets such as Keto and Paleo, is likely to keep driving store sales and ultimately the stock higher after what has been a blockbuster 2019. Shares of the Denver-based restaurant chain are up over 90 percent outpacing the S&P 500's 28.5 percent gain this year.

CHIPOTLE PLANS TO DRAMATICALLY EXPAND ITS DRIVE-THRUS

Chipotle Lifestyle Bowls

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Chipotle's success may be a double-edged sword as rivals step up their game to compete.

"Partly due to the success of Chipotle, fast casual has become the fastest restaurant segment, which means incrementally more competition for Chipotle," Bartlett wrote adding that the competition is also driving up the cost of attractive real estate.

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SHAKSHAKE SHACK70.38+0.11+0.16%

Shake Shack, Five Guys, and Panera Bread are also other heavy hitters in the fast-casual restaurant category.

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Chipotle did not immediately respond to FOX Business' request for comment.