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

Zacks Equity Research

Chipotle Mexican Grill (CMG) closed at $1,049.71 in the latest trading session, marking a -0.87% move from the prior day. This move lagged the S&P 500's daily gain of 1.37%. Elsewhere, the Dow gained 2.05%, while the tech-heavy Nasdaq added 0.78%.

CMG will be looking to display strength as it nears its next earnings release, which is expected to be July 22, 2020. In that report, analysts expect CMG to post earnings of -$0.20 per share. This would mark a year-over-year decline of 105.01%. Meanwhile, our latest consensus estimate is calling for revenue of $1.26 billion, down 12.26% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.19 per share and revenue of $5.57 billion. These totals would mark changes of -41.71% and -0.28%, 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.

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 has moved 9.79% higher within the past month. CMG is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that CMG has a Forward P/E ratio of 129.32 right now. Its industry sports an average Forward P/E of 41.41, so we one might conclude that CMG is trading at a premium comparatively.

Also, we should mention that CMG has a PEG ratio of 8.59. 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. Retail - Restaurants stocks are, on average, holding a PEG ratio of 4.65 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 85, which puts it in the top 34% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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