Analysts Raise Outlooks on Chipotle Stock as Niccol Shakes Up Menu

Near-term options traders have preferred puts on Chipotle

Jun 22, 2018 at 9:16 AM
facebook twitter linkedin


Chipotle Mexican Grill, Inc. (NYSE:CMG) is set to extend its recent uptrend that was launched by the company's blowout earnings report from late April. CMG shares are 1.7% higher in electronic trading, amid news the company is testing new menu options, such as milkshakes and quesadillas, as CEO Brian Niccol continues his turnaround efforts for the fast-casual chain. Meanwhile, analysts also upping their outlooks on CMG stock.

For example, Wedbush this morning boosted its price target by $100 to $450. This follows a similar price-target hike yesterday from Telsey Advisory Group, which raised to $465 from $350. There's plenty of potential for this trend to continue, too, since just six of 27 covering analysts recommend buying the stock at the moment. Plus, the average 12-month price target from this group sits all the way down at $394.21.

Of course, short interest is also very elevated on the equity, representing 13.5% of the float -- even after a 10.9% decline in the most recent reporting period. Chipotle's short-interest ratio still rests at 5.10, meaning that, going by average daily volumes, it'd still take bears a week to buy back their shares, hinting at plenty of buying power still on the sideline.

And even with peak open interest resting at the weekly 6/22 480-strike call -- which expires today -- near-term options traders are unusually put-skewed toward CMG. This is according to its Schaeffer's put/call open interest ratio (SOIR) of 1.58, which stands in the 100th percentile of its annual range.

Finally, a quick look at the charts shows shares of the burrito chain barreling toward the $480-$500 region that capped their upside advance roughly a year ago. But momentum is definitely on Chipotle's side, with the stock already up more than 60% year-to-date, closing Thursday at $463.16, on pace for a fourth straight weekly win.

cmg stock price

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners