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

Zacks Equity Research
ADM (ADM) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Chipotle Mexican Grill (CMG) closed the most recent trading day at $712.44, moving +0.69% from the previous trading session. This change outpaced the S&P 500's 0.66% gain on the day. At the same time, the Dow added 1.03%, and the tech-heavy Nasdaq gained 0.46%.

Heading into today, shares of the Mexican food chain had gained 10.14% over the past month, outpacing the Retail-Wholesale sector's gain of 4.45% and the S&P 500's gain of 3.97% 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. In that report, analysts expect CMG to post earnings of $2.94 per share. This would mark year-over-year growth of 38.03%. Our most recent consensus estimate is calling for quarterly revenue of $1.26 billion, up 9.68% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.42 per share and revenue of $5.29 billion. These totals would mark changes of +37.09% and +8.77%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for CMG. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.54% higher within the past month. CMG currently has a Zacks Rank of #2 (Buy).

Investors should also note CMG's current valuation metrics, including its Forward P/E ratio of 56.98. This valuation marks a premium compared to its industry's average Forward P/E of 21.85.

Meanwhile, CMG's PEG ratio is currently 3.23. 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. The Retail - Restaurants was holding an average PEG ratio of 2.08 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 99, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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