Chipotle (CMG) is set to report third quarter earnings on October 29. Bernstein senior analyst of US restaurants Danilo Gargiulo joins Julie Hyman and Josh Lipton on Market Domination to discuss what investors can expect from the company’s earning report amid Scott Boatwright’s tenure as interim CEO following Brian Niccol's departure to Starbucks (SBUX).

Gargiulo says the interim CEO “has definitely the reputation of being a good potential successor,” but “there is some hesitation until he gets announced as a permanent CEO, as well as lays out the three-to-five-year strategic shift that Chipotle might be embarking on.”

Ahead of earnings, Gargiulo lowered his estimates on concerns about seasonal weakness based on other consumer companies’ results. “It seems that the seasonality is stabilizing the kind of inflow or the increase in sales that we were expecting to see maybe in September didn't materialize to the same extent that we were hoping across the consumer space. So it's rebounding strongly for companies like Chipotle, which is obviously a company that operates in the fast-casual space, which is more protected from the low-income consumer softness that we're seeing across the consumer companies. But, you know, the trends, despite being strong, maybe have not accelerated to the extent that we would have hoped by this point,” he explains.

Despite these worries, Gargiulo still views Chiptole as an attractive stock. “If we consider stocks that are going to be growing in a decelerating environment, clearly Chipotle is one of those. It's also a company whose growth horizon seems to be accelerating over time.”

“Chipotle is already on a very good path. I think at this point, though, investors are looking for some marginal acceleration. So going on the steady path of Chipotle opening the stores as we know today is already sufficient to justify a buy into the stock. However, I think that there are some marginal investors who are hoping for a small acceleration in Chipotle, specifically in areas where Chipotle is already excelling.”

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This post was written by Naomi Buchanan.