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Chipotle Mexican Grill (CMG) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Chipotle Mexican Grill (CMG - Free Report) closed at $828.84, marking a -1.38% move from the previous day. This move lagged the S&P 500's daily loss of 1.23%. At the same time, the Dow lost 1.28%, and the tech-heavy Nasdaq lost 1.13%.

Coming into today, shares of the Mexican food chain had gained 0.24% in the past month. In that same time, the Retail-Wholesale sector lost 0.49%, while the S&P 500 gained 1.95%.

Investors will be hoping for strength from CMG as it approaches its next earnings release, which is expected to be October 22, 2019. The company is expected to report EPS of $3.15, up 45.83% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.38 billion, up 12.35% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.38 per share and revenue of $5.49 billion. These totals would mark changes of +47.68% and +12.85%, respectively, from last year.

Any recent changes to analyst estimates for CMG should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.32% higher. CMG is currently a Zacks Rank #2 (Buy).

Looking at its valuation, CMG is holding a Forward P/E ratio of 62.83. This represents a premium compared to its industry's average Forward P/E of 24.27.

Also, we should mention that CMG has a PEG ratio of 3.41. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Restaurants was holding an average PEG ratio of 2.23 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 153, putting it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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