CHIPOTLE MEXICAN GRILL $275.51 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.5 million; Market cap: $8.7 billion; No dividends paid) is a Denver- based Mexican-restaurant chain. It charges slightly higher prices than fast-food companies, but it offers better-quality food, including naturally raised meat, and superior decor and service.

In the three months ended September 30, 2012, Chipotle’s sales rose 18.4%, to $700.5 million from $591.9 million a year earlier. The company opened 36 new outlets in the quarter. As well, its existing restaurants attracted more customers. That pushed up its same-restaurant sales by 4.8%. Earnings per share rose 24.5%, to $1.93 from $1.55.

Chipotle now has 1,350 locations. The company will open 165 to 180 new restaurants in 2013. That should further increase its sales. However, rising food costs will keep putting pressure on its profit margins, and it’s uncertain whether Chipotle can raise its prices enough to offset those increases.

The company operates in the fickle and extremely competitive U.S. restaurant market. The stock is down from its high of $442.40 in early 2012, but it still trades at more than 26 times Chipotle’s forecast 2013 earnings of $10.40 a share. That’s a high ratio that leaves the stock vulnerable if the company runs into any short-term problems.

Still, Chipotle is a well-established chain with a growing following, especially among healthconscious, environmentally aware consumers.

Chipotle is still a hold.