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Chipotle Mexican Grill (CMG) Gains As Market Dips: What You Should Know

Zacks Equity Research

Chipotle Mexican Grill (CMG) closed the most recent trading day at $761.85, moving +0.26% from the previous trading session. This change outpaced the S&P 500's 0.34% loss on the day. At the same time, the Dow lost 0.09%, and the tech-heavy Nasdaq lost 0.43%.

Coming into today, shares of the Mexican food chain had gained 3.86% in the past month. In that same time, the Retail-Wholesale sector gained 5.97%, while the S&P 500 gained 4.46%.

CMG will be looking to display strength as it nears its next earnings release, which is expected to be July 23, 2019. On that day, CMG is projected to report earnings of $3.70 per share, which would represent year-over-year growth of 28.92%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.40 billion, up 10.63% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13 per share and revenue of $5.42 billion. These totals would mark changes of +43.49% and +11.37%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for CMG. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.06% higher. CMG is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note CMG's current valuation metrics, including its Forward P/E ratio of 58.43. This represents a premium compared to its industry's average Forward P/E of 23.8.

It is also worth noting that CMG currently has a PEG ratio of 3.04. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CMG's industry had an average PEG ratio of 2.12 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 88, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow CMG in the coming trading sessions, be sure to utilize Zacks.com.

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