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Buy Soaring Chipotle (CMG) Stock Ahead of Q4 Earnings Wednesday?
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Shares of Chipotle (CMG - Free Report) have soared over 70% in the last 12 months on the back of solid sales and a chief executive change. Now the question for investors and Wall Street is will Chipotle’s run of success continue, or will it slide back down?
We need to take a look at what to expect from the fast-casual firm’s upcoming fourth-quarter financial results to see.
Overview
Chipotle owned and operated all of its 2,450 restaurants as of the end of the third quarter, across the U.S., Canada, the UK, France, and Germany. The firm rose to prominence for its simplicity and healthy ingredients and helped spark the larger fast-casual movement that includes Shake Shack (SHAK - Free Report) .
Chipotle hired its new CEO Brian Niccol last spring. Niccol took over after Chipotle suffered nearly two years of weak sales, spurred in part by multiple food-safety concerns. Since his arrival from Yum Brands’ (YUM - Free Report) Taco Bell, he has focused on digital ordering and delivery, simmilar to industry giants like Starbucks (SBUX - Free Report) and McDonald’s (MCD - Free Report) and retailers Walmart (WMT - Free Report) and Target (TGT - Free Report) .
For the first nine months of fiscal 2018, Chipotle saw its revenues jump 8.1% from the year-ago period to hit $3.6 billion. Meanwhile, the firm’s comparable sales popped 3.3%. Plus, CMG’s digital sales surged over 34% to help account for roughly 10% of total sales.
As we mentioned at the top, shares of Chipotle have soared roughly 74% over the last year, which crushed its industry’s 1.7% average climb and the S&P 500’s similar expansion. Despite this surge, shares of CMG are still down slightly over the last five years. But investors will also notice how impressive Chipotle stock was for a roughly six-year stretch.
Q4 Outlook & Earnings Trends
Moving on, Chipotle’s Q4 revenues are projected to jump 7.47% to reach $1.19 billion, based on our current Zacks Consensus Estimate. This would fall below Q3’s 8.6% top-line growth.
Along with overall revenue growth, our NFM estimate calls for the company’s comp sales to pop 4.43%, which would come in slightly higher than last quarter’s 4.4% same-store sales growth and outpace Q2’s 3.3% and Q1’s 2.2%. Strength in this vital retail metric could help CMG stock continue its recent surge as it shows customers are coming back to established stores.
At the bottom end of the income statement, CMG’s adjusted quarterly earnings are projected to pop 2.24% to touch $1.37 per share. On top of that, the firm’s full-year earnings are expected to climb over 29%. Peeking ahead to fiscal 2019, the company’s adjusted EPS figure is projected to surge roughly 41% above our 2018 estimate, which should be an encouraging sign for investors.
We should also point out that Chipotle’s earnings estimate revisions activity has leaned far more heavily to the positive side over the last 30 days, with all revisions in the last seven days coming in higher. This means that at least some analysts are more bullish on CMG’s earnings outlook than they were not too long ago.
Bottom Line
Chipotle is currently a Zacks Rank #3 (Hold) that sports “A” grades for both Growth and Momentum in our Style Scores system. With that said, Chipotle stock sits near its 52-week high and it seems that many U.S. funds are waiting for its official Q4 results to determine if they want to buy more shares.
Chipotle is scheduled to release its fourth-quarter financial results after the closing bell on Wednesday, February 6. Make sure to come back to Zacks for a complete post-earnings breakdown.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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Buy Soaring Chipotle (CMG) Stock Ahead of Q4 Earnings Wednesday?
Shares of Chipotle (CMG - Free Report) have soared over 70% in the last 12 months on the back of solid sales and a chief executive change. Now the question for investors and Wall Street is will Chipotle’s run of success continue, or will it slide back down?
We need to take a look at what to expect from the fast-casual firm’s upcoming fourth-quarter financial results to see.
Overview
Chipotle owned and operated all of its 2,450 restaurants as of the end of the third quarter, across the U.S., Canada, the UK, France, and Germany. The firm rose to prominence for its simplicity and healthy ingredients and helped spark the larger fast-casual movement that includes Shake Shack (SHAK - Free Report) .
Chipotle hired its new CEO Brian Niccol last spring. Niccol took over after Chipotle suffered nearly two years of weak sales, spurred in part by multiple food-safety concerns. Since his arrival from Yum Brands’ (YUM - Free Report) Taco Bell, he has focused on digital ordering and delivery, simmilar to industry giants like Starbucks (SBUX - Free Report) and McDonald’s (MCD - Free Report) and retailers Walmart (WMT - Free Report) and Target (TGT - Free Report) .
For the first nine months of fiscal 2018, Chipotle saw its revenues jump 8.1% from the year-ago period to hit $3.6 billion. Meanwhile, the firm’s comparable sales popped 3.3%. Plus, CMG’s digital sales surged over 34% to help account for roughly 10% of total sales.
As we mentioned at the top, shares of Chipotle have soared roughly 74% over the last year, which crushed its industry’s 1.7% average climb and the S&P 500’s similar expansion. Despite this surge, shares of CMG are still down slightly over the last five years. But investors will also notice how impressive Chipotle stock was for a roughly six-year stretch.
Q4 Outlook & Earnings Trends
Moving on, Chipotle’s Q4 revenues are projected to jump 7.47% to reach $1.19 billion, based on our current Zacks Consensus Estimate. This would fall below Q3’s 8.6% top-line growth.
Along with overall revenue growth, our NFM estimate calls for the company’s comp sales to pop 4.43%, which would come in slightly higher than last quarter’s 4.4% same-store sales growth and outpace Q2’s 3.3% and Q1’s 2.2%. Strength in this vital retail metric could help CMG stock continue its recent surge as it shows customers are coming back to established stores.
At the bottom end of the income statement, CMG’s adjusted quarterly earnings are projected to pop 2.24% to touch $1.37 per share. On top of that, the firm’s full-year earnings are expected to climb over 29%. Peeking ahead to fiscal 2019, the company’s adjusted EPS figure is projected to surge roughly 41% above our 2018 estimate, which should be an encouraging sign for investors.
We should also point out that Chipotle’s earnings estimate revisions activity has leaned far more heavily to the positive side over the last 30 days, with all revisions in the last seven days coming in higher. This means that at least some analysts are more bullish on CMG’s earnings outlook than they were not too long ago.
Bottom Line
Chipotle is currently a Zacks Rank #3 (Hold) that sports “A” grades for both Growth and Momentum in our Style Scores system. With that said, Chipotle stock sits near its 52-week high and it seems that many U.S. funds are waiting for its official Q4 results to determine if they want to buy more shares.
Chipotle is scheduled to release its fourth-quarter financial results after the closing bell on Wednesday, February 6. Make sure to come back to Zacks for a complete post-earnings breakdown.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>