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

Zacks Equity Research
·3 min read

In the latest trading session, Chipotle Mexican Grill (CMG) closed at $1,386.71, marking a +0.91% move from the previous day. This move outpaced the S&P 500's daily gain of 0.64%. At the same time, the Dow added 0.65%, and the tech-heavy Nasdaq gained 0.14%.

Coming into today, shares of the Mexican food chain had gained 5.95% in the past month. In that same time, the Retail-Wholesale sector gained 1.3%, while the S&P 500 gained 3.19%.

CMG will be looking to display strength as it nears its next earnings release, which is expected to be February 2, 2021. In that report, analysts expect CMG to post earnings of $3.73 per share. This would mark year-over-year growth of 30.42%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.61 billion, up 11.81% from the year-ago period.

CMG's full-year Zacks Consensus Estimates are calling for earnings of $10.98 per share and revenue of $5.99 billion. These results would represent year-over-year changes of -21.85% and +7.22%, respectively.

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

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.

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. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. CMG is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that CMG has a Forward P/E ratio of 125.21 right now. This represents a premium compared to its industry's average Forward P/E of 34.7.

Also, we should mention that CMG has a PEG ratio of 6.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 3.04 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 167, which puts it in the bottom 35% 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.

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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Zacks Investment Research