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How to Beat Chipotle's Stock (CMG) Ahead of Earnings
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On Thursday, July 21st, Chipotle Mexican Grill Inc. (CMG - Free Report) will release its Q2 earnings results. The company is currently a Zacks Rank #3 (Hold) and shares are down about 12.89% year-to-date.
David Bartosiak gave his thoughts on Chipotle’s past earnings, looked at what is currently going on with the company, and gave his prediciton on Chipotle's earnings announcement.
Furthermore, Dave looked into some potential options trades for investors looking to make a play on Chipotle ahead of earnings.
Chipotle in Focus
Chipotle is a restaurant chain that together with its subsidiaries operates Mexican food restaurants. As of December 2015, the company operates 1,971 restaurants in the U.S., 11 in Canada, 7 in England, 4 in France, and 1 in Germany. Chipotle also owns 13 ShopHouse Southeast Asian Kitchen locations, as well as three Pizzeria Locale restaurants.
Chipotle is coming off of an earnings beat of 16.98% in its Q1 2016 earnings report, posting an EPS that was $0.18 higher than the Zacks Consensus Estimate.
CMG has an average EPS surprise of 8.53 % for the last four quarters. In Q2 2015, CMG beat estimates by 0.91% before missing estimates in Q3 2015 by 1%. However, in the last two quarters of 2015 CMG beat both Consensus Estimates by 17.3% and 16.98% respectively.
Heading into this earnings report, our Most Accurate Estimate for Chipotle is $1.01, $0.07 lower than the Zacks Consensus Estimate.
Chipotle has taken quite a beating recently due to negative publicity stemming from the two outbreaks of the norovirus and E. coli that spanned 14 states and sickened over 60 customers earlier this year.
Chipotle’s health-based, all natural brand has suffered, and the company has since instated multiple initiatives to bring customers back. The costs associated with these programs are likely to affect profitability in this quarter’s earnings report.
This, coupled with recent downward earnings estimate revisions characterizes a comparatively bleak forecast for Chipotle’s Q2 earnings announcement. However, such initiatives as the Chiptopia Summer Rewards program, along with the addition of Chorizo as a new menu item may help to offset some of the bruising that Chipotle has developed recently.
Subscribe to our channel to be notified of future live streams and make sure to check out our other videos for more stock information.
Dave Bartosiak is the editor of the Momentum Trader and Home Run Investor service. He has over a decade of experience in the financial services industry. He has traded forex, futures, stocks, and options. Mr. Bartosiak is a frequent guest on popular business news TV channels such as Bloomberg TV. He’s also the host of a light-hearted, Millennial-minded series of videos called “Trending Stocks.”
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
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How to Beat Chipotle's Stock (CMG) Ahead of Earnings
On Thursday, July 21st, Chipotle Mexican Grill Inc. (CMG - Free Report) will release its Q2 earnings results. The company is currently a Zacks Rank #3 (Hold) and shares are down about 12.89% year-to-date.
David Bartosiak gave his thoughts on Chipotle’s past earnings, looked at what is currently going on with the company, and gave his prediciton on Chipotle's earnings announcement.
Furthermore, Dave looked into some potential options trades for investors looking to make a play on Chipotle ahead of earnings.
Chipotle in Focus
Chipotle is a restaurant chain that together with its subsidiaries operates Mexican food restaurants. As of December 2015, the company operates 1,971 restaurants in the U.S., 11 in Canada, 7 in England, 4 in France, and 1 in Germany. Chipotle also owns 13 ShopHouse Southeast Asian Kitchen locations, as well as three Pizzeria Locale restaurants.
Chipotle is coming off of an earnings beat of 16.98% in its Q1 2016 earnings report, posting an EPS that was $0.18 higher than the Zacks Consensus Estimate.
CMG has an average EPS surprise of 8.53 % for the last four quarters. In Q2 2015, CMG beat estimates by 0.91% before missing estimates in Q3 2015 by 1%. However, in the last two quarters of 2015 CMG beat both Consensus Estimates by 17.3% and 16.98% respectively.
CHIPOTLE MEXICN Price, Consensus and EPS Surprise
CHIPOTLE MEXICN Price, Consensus and EPS Surprise | CHIPOTLE MEXICN Quote
Heading into this earnings report, our Most Accurate Estimate for Chipotle is $1.01, $0.07 lower than the Zacks Consensus Estimate.
Chipotle has taken quite a beating recently due to negative publicity stemming from the two outbreaks of the norovirus and E. coli that spanned 14 states and sickened over 60 customers earlier this year.
Chipotle’s health-based, all natural brand has suffered, and the company has since instated multiple initiatives to bring customers back. The costs associated with these programs are likely to affect profitability in this quarter’s earnings report.
This, coupled with recent downward earnings estimate revisions characterizes a comparatively bleak forecast for Chipotle’s Q2 earnings announcement. However, such initiatives as the Chiptopia Summer Rewards program, along with the addition of Chorizo as a new menu item may help to offset some of the bruising that Chipotle has developed recently.
Subscribe to our channel to be notified of future live streams and make sure to check out our other videos for more stock information.
Dave Bartosiak is the editor of the Momentum Trader and Home Run Investor service. He has over a decade of experience in the financial services industry. He has traded forex, futures, stocks, and options. Mr. Bartosiak is a frequent guest on popular business news TV channels such as Bloomberg TV. He’s also the host of a light-hearted, Millennial-minded series of videos called “Trending Stocks.”
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.