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Chipotle Mexican Grill (CMG) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
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Chipotle Mexican Grill (CMG) closed at $636.99 in the latest trading session, marking a +0.95% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.7%. Elsewhere, the Dow gained 0.58%, while the tech-heavy Nasdaq added 0.69%.

Heading into today, shares of the Mexican food chain had gained 6.29% over the past month, outpacing the Retail-Wholesale sector's gain of 1.67% and the S&P 500's gain of 1.95% in that time.

Investors will be hoping for strength from CMG as it approaches its next earnings release, which is expected to be April 24, 2019. The company is expected to report EPS of $2.89, up 35.68% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.26 billion, up 9.53% from the year-ago period.

CMG's full-year Zacks Consensus Estimates are calling for earnings of $12.24 per share and revenue of $5.29 billion. These results would represent year-over-year changes of +35.1% and +8.65%, respectively.

It is also important to note the recent changes to analyst estimates for CMG. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 0.69% higher. CMG is currently a Zacks Rank #3 (Hold).

Digging into valuation, CMG currently has a Forward P/E ratio of 51.55. This valuation marks a premium compared to its industry's average Forward P/E of 22.31.

Also, we should mention that CMG has a PEG ratio of 2.92. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. CMG's industry had an average PEG ratio of 2 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 160, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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