Options Traders Eye Restaurant Stock After Q4 Miss

The security is taking a breather from its January rally

Digital Content Manager
Feb 8, 2023 at 10:41 AM
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Chipotle Mexican Grill, Inc. (NYSE:CMG) is down 4.1% at $1,651.71 at last check, after reporting reported worse-than-expected fourth-quarter results, as traffic slowed at its locations and consumers limited restaurant spending due to higher delivery prices. What's more, the restaurant chain's quarterly comparable sales missed the mark, and current-quarter sales growth is now expected to be in the high single-digits.

Analysts are having mixed reactions, with eight hiking their price target on CMG and three sporting a cut. Notably, Citigroup raised its price objective to $2,084 from $1,986. The brokerage bunch has been bullish on CMG, with 17 of 23 firms in question sporting a "buy" or better rating.

So far today, 3,448 calls and 2,900 puts have been exchanged, for overall volume that's six times the intraday average. Most popular is the weekly 2/10 1,600-strike put, followed by the1,750-strike call in the same weekly series, with new positions being opened at both.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1.12 puts have been bought for every call over the last 50 days. This ratio stands higher than 92% of readings from the past year, suggesting there has been a strong appetite for bearish bets of late.  

Chipotle Mexican Grill stock is finally cooling off from a rally that started in early January, and fell just shy of its 2022 peak of $1,752.15 yesterday. The security has added 29.1% over the past nine months.

 

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