In a recent market session, Chipotle Mexican Grill (CMG) experienced a slight downturn, with its shares decreasing by 0.7% to reach $57.97. This movement positioned CMG’s performance behind the S&P 500, which recorded a daily gain of 0.4%. Meanwhile, other major market indices demonstrated positive momentum, as the Dow Jones Industrial Average rose by 0.62% and the Nasdaq Composite gained 0.6%.
Over the past month, Chipotle’s stock had shown a positive trend, increasing by 4.68%. However, this growth was still less pronounced compared to the Retail-Wholesale sector’s gain of 5.71% and the S&P 500’s rise of 1.71% during the same period.
Investors are keenly anticipating Chipotle Mexican Grill’s upcoming earnings report, scheduled for release on October 29, 2024. Current projections estimate the company’s Earnings Per Share (EPS) to be $0.24, representing a 4.35% increase from the same quarter last year. Revenue forecasts are also optimistic, with consensus estimates pointing towards $2.81 billion, a substantial 13.64% growth compared to the corresponding quarter in the previous year.
Looking ahead to the full fiscal year, analysts’ consensus estimates predict an EPS of $1.08 and revenue of $11.33 billion for Chipotle. These figures would signify significant year-over-year growth of 20% in earnings and 14.78% in revenue, respectively.
Market observers are also paying close attention to revisions in analyst earnings forecasts for Chipotle Mexican Grill. Upward revisions in these estimates are generally seen as a positive signal, indicating growing confidence among analysts regarding the company’s near-term business prospects and profitability. These revisions can often be precursors to stock price movements.
The Zacks Rank system is a tool used by investors to potentially leverage these earnings estimate revisions. This proprietary model provides a rating system ranging from #1 (Strong Buy) to #5 (Strong Sell), based on these estimate changes. Historically, Zacks Rank #1 stocks have shown an impressive average annual return of +25% since 1988, based on independent audits. Currently, Chipotle Mexican Grill holds a Zacks Rank #4 (Sell). Notably, the Zacks Consensus EPS estimate for Chipotle has remained stable over the last 30 days.
From a valuation standpoint, Chipotle Mexican Grill’s stock is currently trading at a Forward Price-to-Earnings (P/E) ratio of 53.88. When compared to the average Forward P/E ratio of 20.7 for its industry, this suggests that Chipotle is currently trading at a premium relative to its peers.
Furthermore, Chipotle’s Price/Earnings to Growth (PEG) ratio stands at 2.44. The PEG ratio, which factors in a company’s expected earnings growth, provides a more nuanced valuation perspective than the P/E ratio alone. As of the previous trading day, the Retail – Restaurants industry exhibited an average PEG ratio of 2.22.
Within the broader market classification, the Retail – Restaurants industry falls under the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 178, placing it within the bottom 30% of over 250 industries ranked by Zacks. The Zacks Industry Rank is determined by the average Zacks Rank of the constituent companies within each industry, with research indicating that top-ranked industries tend to outperform lower-ranked ones.
Investors and market watchers are encouraged to utilize resources like Zacks.com to stay informed about these and other market-moving metrics as they track Chipotle Mexican Grill’s stock and overall market trends in upcoming trading sessions.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own due diligence before making any investment decisions.
