Analysts Rush to Catch Up to Surging Chipotle Stock

Jefferies new CMG price target is in line with Tuesday's close

Sep 25, 2019 at 10:19 AM
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Jefferies raised its price target on Chipotle Mexican Grill, Inc. (NYSE:CMG) stock to $820 from $700, saying it expects the burrito chain to post solid third-quarter financial results, even amid weaker-than-forecast same-store sales. The brokerage firm's new price target is still a discount to last night's close at $824.49, and this morning, CMG stock is down 1.1% at $815.51.

Chipotle stock has put in an impressive run on the charts in 2019, up 90% so far. Plus, the stock's recent pullback from its Sept. 9 record high of $857.32 was quickly contained by its 60-day moving average, while just below here is familiar support at its 80-day trendline.

Nevertheless, there's ample skepticism priced into the shares, with 63% of covering analysts calling CMG a "hold" or worse, and the average 12-month price target docked at $786.31. Plus, a healthy 6.7% of the equity's float is sold short, or 4.1 times the average daily pace of trading. A round of bull notes or short covering could help Chipotle shares resume their longer-term uptrend.

Options traders would certainly welcome more gains for CMG stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 1.19 ranks in the 64th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

 

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