Analysts Flock to Chipotle After Blowout Earnings Report

Chipotle reported Q4 earnings and same-store sales that soared past estimates

by Patrick Martin

Published on Feb 7, 2019 at 9:47 AM

The shares of Chipotle Mexican Grill, Inc. (NYSE:CMG) are up 10% to trade at $578.98, and nabbed a three-year high of $580 out of the gate. The burrito chain reported fourth-quarter adjusted earnings of $1.72 cents per share -- smashing the average estimate of $1.37 -- while revenue of $1.20 billion also topped the $1.19 billion forecast. Same-store sales also emphatically beat expectations, with Chipotle citing an increase in transactions both in-store and online. 

What's followed can only be described as a barrage of bull notes. No fewer than 13 brokerages have issued price-target hikes, including to $650 from $560 at Bernstein, territory CMG has not traded near since October 2015. 

On the charts, Chipotle stock has now added 30% in 2019. CMG tumbled to the $380 level amid the Christmas Eve broad market sell-off. However, the shares bounced from there, an area that also coincided with their 320-day moving average. 

Today's bull gap is likely catching bearish traders off guard. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CMG's 10-day put/call volume ratio of 1.10 ranks in the 94th annual percentile, meaning puts have been bought to open relative to calls at an accelerated clip. Plus, 9.5% of the security's available float is dedicated to short interest.

Despite the wave of bull notes today, Chipotle could still face more shifts in analyst sentiment. Of the 28 brokerages covering the security, 15 rate it a "hold" or worse. And the stock's consensus 12-month price-target of $540.64 now sits below its current perch.
SAGE Therapeutics Stock Hot Ahead of Earnings
The drug name is scheduled to report on Tuesday
Bear Signal Flashing for This Healthcare Stock Before Earnings
At least four analysts have issued price-target cuts on the stock this week
Signal Says This Retail Stock's on Sale
The shares pulled back this week on news of a Levi Strauss IPO

Get Schaeffer's pre-market news bulletin every morning before the bell rings.
It's free to sign up.


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

IRA/401K Investment Guide: 2019 Stock Market Crash
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.
3 of Today's Worst Nasdaq Stocks
The stocks are sitting out today's rally in the broader equities market
2019 Rally Continues for Stock Market
The Nasdaq is eyeing its longest weekly win streak since 2016
How American Lithium Tech May Be Poised for 614% Growth
A new lithium technology could change the face of lithium production forever.