Raymond James upgrades Chipotle to strong buy after menu price hikes

Customers order from a Chipotle restaurant at the King of Prussia Mall in King of Prussia, Pennsylvania.
Mark Makela | Reuters

Chipotle Mexican Grill's higher menu prices won't scare away customers and will lead to better results in the quarters ahead, according to Raymond James.

The restaurant chain announced last week that it had hiked menu prices 4% to cover rising wages. Chipotle has also said it will raise its average hourly wage to $15 per hour by the end of June.

Raymond James analyst Brian Vaccaro upgraded the restaurant stock to strong buy from outperform, saying that the company has room to raise prices and the move will boost its financial results.