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

Zacks Equity Research

In the latest trading session, Chipotle Mexican Grill (CMG) closed at $829.07, marking a +0.71% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.09%, while the tech-heavy Nasdaq added 0.4%.

Coming into today, shares of the Mexican food chain had lost 1.4% in the past month. In that same time, the Retail-Wholesale sector gained 0.12%, while the S&P 500 lost 0.14%.

Investors will be hoping for strength from CMG as it approaches its next earnings release, which is expected to be October 22, 2019. In that report, analysts expect CMG to post earnings of $3.16 per share. This would mark year-over-year growth of 46.3%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.38 billion, up 12.43% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.38 per share and revenue of $5.49 billion. These totals would mark changes of +47.68% and +12.87%, respectively, from last year.

Any recent changes to analyst estimates for CMG should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.18% higher. CMG is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, CMG is holding a Forward P/E ratio of 61.51. Its industry sports an average Forward P/E of 21.51, so we one might conclude that CMG is trading at a premium comparatively.

We can also see that CMG currently has a PEG ratio of 3.33. 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 2.03 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 153, which puts it in the bottom 40% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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