Today’s Bear of the Day has been a punching bag of a stock and the butt of a lot of jokes. After a huge scandal involving E Coli in their food, this company has struggled to regain the momentum it once had. I’m sure by now you already know what I’m talking about. That’s right, one of my favorite places for a quick bite and the Godfather of Fast Casual, Chipotle.
Chipotle Mexican Grill (CMG - Free Report) operates Chipotle Mexican Grill restaurants. The Company's Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts.
The stock is a Zacks Rank #5 (Strong Sell) because of several earnings estimate revisions to the downside. Over the last sixty days, twelve analysts have dropped their estimates for the current quarter while fourteen have cut their numbers for next year. The bearish sentiment has dropped the Zacks Consensus Estimate for the current quarter from $2.37 to $1.81 while next year’s number has plummeted from $11.91 to $10.51.
Shares of CMG have come under pressure since getting close to $500 in mid-May. From there, shares have broken down through the 50-day moving average, tumbling under $300 before bouncing to back to the 50-day with the stock near $319.21. At this level, the Commodity Channel Index is overbought at 136, implying that the buying may be coming to an end. The 50-day moving average is now providing upside resistance at $326.18.
For those of you trying to come in and bargain shop for Chipotle here, I’d wait for the CCI to come back down at least to the zero line, if not wait for another more traditional buy to set up. Traditionally, you want to wait for the CCI to get oversold, under -100, then cross over the zero line to give a “Buy” signal.
Investors looking for other stocks in the restaurant industry should check out Zacks Rank #1 (Strong Buy) Famous Dave’s (DAVE) and Zacks Rank #2 (Buy) stock Del Taco (TACO).
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Today’s Bear of the Day has been a punching bag of a stock and the butt of a lot of jokes. After a huge scandal involving E Coli in their food, this company has struggled to regain the momentum it once had. I’m sure by now you already know what I’m talking about. That’s right, one of my favorite places for a quick bite and the Godfather of Fast Casual, Chipotle.
Chipotle Mexican Grill (CMG - Free Report) operates Chipotle Mexican Grill restaurants. The Company's Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts.
The stock is a Zacks Rank #5 (Strong Sell) because of several earnings estimate revisions to the downside. Over the last sixty days, twelve analysts have dropped their estimates for the current quarter while fourteen have cut their numbers for next year. The bearish sentiment has dropped the Zacks Consensus Estimate for the current quarter from $2.37 to $1.81 while next year’s number has plummeted from $11.91 to $10.51.
Shares of CMG have come under pressure since getting close to $500 in mid-May. From there, shares have broken down through the 50-day moving average, tumbling under $300 before bouncing to back to the 50-day with the stock near $319.21. At this level, the Commodity Channel Index is overbought at 136, implying that the buying may be coming to an end. The 50-day moving average is now providing upside resistance at $326.18.
For those of you trying to come in and bargain shop for Chipotle here, I’d wait for the CCI to come back down at least to the zero line, if not wait for another more traditional buy to set up. Traditionally, you want to wait for the CCI to get oversold, under -100, then cross over the zero line to give a “Buy” signal.
Investors looking for other stocks in the restaurant industry should check out Zacks Rank #1 (Strong Buy) Famous Dave’s (DAVE) and Zacks Rank #2 (Buy) stock Del Taco (TACO).
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on CMG - FREE