Checking in With Chipotle Stock Ahead of Earnings

CMG has a tendancy to underperform in October

Deputy Editor
Oct 19, 2021 at 1:55 PM
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Restaurant concern Chipotle Mexican Grill, Inc. (NYSE:CMG) is up 0.4% at $1,860.50 this afternoon, just ahead of its third-quarter earnings report, due out after the close on Thursday, Oct. 21. Below we will take a look at how CMG has been faring on the charts, and see what the options market is pricing in for the stock ahead of the event. 

The last time we checked on Chipotle stock, it had just landed on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks to avoid in October. For most of the month, CMG has consolidated below the $1,880 level, which coincides with the formerly supportive 40-day moving average. Month-over-month, CMG is down 2.5%, though it still sports a 34.1% year-to-date lead. 

CMG Chart October 19

In terms of the company's earnings history, CMG has suffered negative next-day returns during all but two of the past eight quarters, averaging a 5.7% swing, regardless of direction. This quarter, the options market looks to be eyeing a slightly higher post-earnings shift, pricing in a 6.7% move.

An unwinding of optimism in the options pits could put pressure on the shares, as near-term traders are much more call-biased than usual at the moment. This is per Chipotle stock's Schaeffer's put/call open interest ratio (SOIR), which ranks in the 6th percentile of its annual range.

What's more, analysts are mostly bullish on CMG, which could spark a shift in sentiment among the brokerage bunch. Of the 25 in coverage, 16 consider Chipotle stock a "buy" or better. 

 

 

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