Chipotle Mexican Grill (NYSE:CMG) Trading Down 7.1% – Here’s Why

Chipotle Mexican Grill, Inc. (NYSE:CMG) fell 7.1% during trading on Tuesday . The company traded as low as $34.27 and last traded at $34.8020. Approximately 12,171,939 shares changed hands during mid-day trading, a decline of 31% from the average daily volume of 17,747,648 shares. The stock had previously closed at $37.46.

Chipotle Mexican Grill News Summary

Here are the key news stories impacting Chipotle Mexican Grill this week:

• Positive Sentiment: Analysts remain supportive despite the food-safety concerns. BTIG reaffirmed its “buy” rating with a $45 price target, and Argus also raised its target to $45, implying substantial upside from recent levels. BTIG rating update Argus price target update
• Positive Sentiment: Recent operating results showed signs of improving customer demand: second-quarter comparable sales rose 2.2%, helped by new menu offerings and a revamped rewards program. Another analysis said the prior transaction slump may be reversing. Chipotle transaction trends analysis
• Neutral Sentiment: Chipotle removed jalapeños from Minnesota restaurants and switched suppliers while cooperating with health authorities. The company said its previously issued annual targets do not include any financial impact from the outbreak, leaving potential estimates risk if the disruption spreads. Chipotle annual targets and outbreak
• Negative Sentiment: The outbreak is the primary reason CMG has decreased. More than 100 cases were initially reported in Minnesota, and the latest report indicates the number of sickened people has grown, raising the risk of broader recalls, lawsuits, store disruption and damage to Chipotle’s food-safety reputation. Report on people sickened by jalapeños
• Negative Sentiment: A separate bearish view argues that the recent sales rebound does not offset falling net income and EPS, as higher food and labor costs compress margins. At a premium valuation, continued earnings pressure leaves less room for execution or food-safety setbacks. Chipotle risk profile analysis

Analyst Upgrades and Downgrades

A number of brokerages have issued reports on CMG. Morgan Stanley raised their target price on Chipotle Mexican Grill from $37.00 to $39.00 and gave the stock an “equal weight” rating in a report on Thursday, July 30th. DA Davidson increased their price target on shares of Chipotle Mexican Grill from $45.00 to $50.00 and gave the company a “buy” rating in a research report on Thursday, July 30th. Stephens reissued a “positive” rating and set a $40.00 price objective (up from $36.00) on shares of Chipotle Mexican Grill in a research note on Thursday, July 30th. Zacks Research upgraded shares of Chipotle Mexican Grill from a “strong sell” rating to a “hold” rating in a report on Friday, April 17th. Finally, BNP Paribas Exane upped their target price on shares of Chipotle Mexican Grill from $37.00 to $39.00 and gave the company a “neutral” rating in a research note on Thursday, April 30th. Twenty-four research analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average price target of $44.16.

Chipotle Mexican Grill Trading Down 2.3%

The company has a 50 day simple moving average of $33.01 and a 200-day simple moving average of $34.47. The stock has a market cap of $42.67 billion, a price-to-earnings ratio of 30.93, a P/E/G ratio of 2.16 and a beta of 0.94.

Chipotle Mexican Grill (NYSE:CMG) last issued its quarterly earnings results on Wednesday, July 29th. The restaurant operator reported $0.33 earnings per share for the quarter, topping the consensus estimate of $0.32 by $0.01. The company had revenue of $3.35 billion during the quarter, compared to analysts’ expectations of $3.33 billion. Chipotle Mexican Grill had a net margin of 11.43% and a return on equity of 54.65%. The business’s quarterly revenue was up 9.3% on a year-over-year basis. During the same period last year, the business earned $0.33 EPS. Equities analysts forecast that Chipotle Mexican Grill, Inc. will post 1.14 earnings per share for the current fiscal year.

Institutional Investors Weigh In On Chipotle Mexican Grill

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. Wealth Watch Advisors INC acquired a new stake in shares of Chipotle Mexican Grill in the third quarter valued at about $25,000. MV Capital Management Inc. acquired a new position in Chipotle Mexican Grill during the fourth quarter valued at approximately $26,000. Osbon Capital Management LLC bought a new position in Chipotle Mexican Grill in the fourth quarter valued at approximately $28,000. Kelleher Financial Advisors bought a new position in Chipotle Mexican Grill in the second quarter valued at approximately $28,000. Finally, Merkkuri Wealth Advisors LLC acquired a new position in shares of Chipotle Mexican Grill during the 1st quarter worth approximately $28,000. 91.30% of the stock is owned by institutional investors.

Chipotle Mexican Grill Company Profile

Chipotle Mexican Grill is a fast-casual restaurant company known for its Mexican-inspired menu of burritos, bowls, tacos and salads. Founded in 1993 by Steve Ells, the chain emphasizes fresh, customizable meals made from a limited menu of core ingredients and a focus on ingredient quality. Chipotle operates primarily company-owned restaurants and offers dine-in, takeout, catering and delivery through its own digital platforms and third-party partners.

The company is headquartered in Newport Beach, California, and traces its roots to Denver, Colorado.