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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 $834.97, marking a +1.12% move from the previous day. This change outpaced the S&P 500's 0.03% gain on the day. Meanwhile, the Dow gained 0.13%, and the Nasdaq, a tech-heavy index, lost 0.11%.

Heading into today, shares of the Mexican food chain had gained 0.68% over the past month, lagging the Retail-Wholesale sector's gain of 4.61% and the S&P 500's gain of 4.17% in that time.

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 $3.15 per share. This would mark year-over-year growth of 45.83%. Our most recent consensus estimate is calling for quarterly revenue of $1.38 billion, up 12.29% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.36 per share and revenue of $5.49 billion. These totals would mark changes of +47.46% and +12.81%, respectively, from last year.

Any recent changes to analyst estimates for CMG should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

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 0.77% higher within the past month. CMG is currently a Zacks Rank #3 (Hold).

Looking at its valuation, CMG is holding a Forward P/E ratio of 61.81. Its industry sports an average Forward P/E of 23.67, so we one might conclude that CMG is trading at a premium comparatively.

Investors should also note that CMG has a PEG ratio of 3.29 right now. 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. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.37 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 174, which puts it in the bottom 33% 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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