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

·3 min read

In the latest trading session, Chipotle Mexican Grill (CMG) closed at $1,747.94, marking a +1.43% move from the previous day. This move outpaced the S&P 500's daily gain of 1.06%. At the same time, the Dow added 0.71%, and the tech-heavy Nasdaq gained 0.18%.

Coming into today, shares of the Mexican food chain had gained 3.58% in the past month. In that same time, the Retail-Wholesale sector gained 0.59%, while the S&P 500 lost 1.14%.

Chipotle Mexican Grill will be looking to display strength as it nears its next earnings release, which is expected to be October 25, 2022. In that report, analysts expect Chipotle Mexican Grill to post earnings of $9.06 per share. This would mark year-over-year growth of 29.06%. Our most recent consensus estimate is calling for quarterly revenue of $2.23 billion, up 14.41% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $32.50 per share and revenue of $8.74 billion, which would represent changes of +27.85% and +15.79%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Chipotle Mexican Grill. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 remained stagnant within the past month. Chipotle Mexican Grill currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Chipotle Mexican Grill is currently trading at a Forward P/E ratio of 53.02. Its industry sports an average Forward P/E of 20.02, so we one might conclude that Chipotle Mexican Grill is trading at a premium comparatively.

It is also worth noting that CMG currently has a PEG ratio of 2.27. 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 industry currently had an average PEG ratio of 2.15 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 171, putting it in the bottom 33% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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