Avity Investment Management Inc. Boosts Stake in Chipotle Mexican Grill, Inc. $CMG

Key Points

• Avity Investment Management increased its Chipotle stake by 1,572.6% in the third quarter, holding 109,354 shares valued at approximately $3.49 million. Institutional investors collectively own 91.3% of the company.
• Chipotle shares recently traded at $31.64, with a market capitalization of about $40 billion. The stock is rated “Moderate Buy” by analysts, with a consensus price target of $43.91.
• Reports that Starbucks may pursue a roughly $39 billion–$41 billion acquisition briefly boosted CMG, but the absence of a confirmed offer and concerns about financing and integration have since weighed on the stock.

Avity Investment Management Inc. increased its stake in shares of Chipotle Mexican Grill, Inc. (NYSE:CMG - Free Report) by 1,572.6% in the third quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The firm owned 109,354 shares of the restaurant operator's stock after purchasing an additional 102,816 shares during the period. Avity Investment Management Inc.'s holdings in Chipotle Mexican Grill were worth $3,494,000 as of its most recent SEC filing.

A number of other institutional investors and hedge funds have also added to or reduced their stakes in the stock. MV Capital Management Inc. bought a new position in Chipotle Mexican Grill during the fourth quarter worth about $26,000. Osbon Capital Management LLC bought a new stake in shares of Chipotle Mexican Grill in the 2nd quarter valued at about $26,000. Meeder Asset Management Inc. bought a new stake in shares of Chipotle Mexican Grill in the 2nd quarter valued at about $27,000. Merkkuri Wealth Advisors LLC acquired a new stake in shares of Chipotle Mexican Grill in the 1st quarter valued at approximately $28,000. Finally, Kelleher Financial Advisors bought a new position in Chipotle Mexican Grill during the 2nd quarter worth approximately $28,000. Institutional investors own 91.30% of the company's stock.

Analyst Upgrades and Downgrades

CMG has been the subject of a number of analyst reports. Robert W. Baird restated a "neutral" rating and set a $40.00 price objective (down from $44.00) on shares of Chipotle Mexican Grill in a report on Monday, August 24th. Citigroup reduced their price target on shares of Chipotle Mexican Grill from $46.00 to $45.00 and set a "buy" rating on the stock in a research report on Monday, July 13th. Weiss Ratings upgraded shares of Chipotle Mexican Grill from a "sell (d+)" rating to a "hold (c-)" rating in a research report on Friday, August 7th. Stephens reaffirmed 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. Finally, Seaport Research Partners began coverage on Chipotle Mexican Grill in a report on Wednesday, September 16th. They set a "neutral" rating on the stock. Twenty-three investment analysts have rated the stock with a Buy rating and ten have given a Hold rating to the company's stock. According to MarketBeat, Chipotle Mexican Grill has an average rating of "Moderate Buy" and a consensus target price of $43.91.

Key Chipotle Mexican Grill News

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

• Positive Sentiment: Starbucks has reportedly worked with advisers on a potential acquisition of Chipotle, a transaction that could value the burrito chain at roughly $39 billion to $41 billion. A formal bid could provide CMG shareholders with a takeover premium and support the stock’s valuation. The report is particularly notable because Starbucks CEO Brian Niccol previously led Chipotle. Why a Starbucks takeover of Chipotle would — and wouldn't — make sense for both companies
• Positive Sentiment: CMG shares initially rallied sharply on the takeover reports, reflecting expectations that Starbucks could offer a meaningful premium. However, the absence of a confirmed proposal means the gains remain largely speculation-driven. Chipotle Stocks Rallies on Report Starbucks Might Buy the Burrito Chain
• Neutral Sentiment: Chipotle’s upcoming third-quarter earnings report is another near-term catalyst. Analysts currently expect earnings per share to be roughly unchanged from the prior year, suggesting the stock may need solid sales, restaurant-opening and margin commentary to sustain investor interest. Earnings Preview: What to Expect From Chipotle Mexican Grill’s Report
• Negative Sentiment: Investors are increasingly focused on the risks of a potential transaction, including Starbucks’ financing burden, integration challenges and the possibility that the deal could distract management from its own turnaround. Those concerns, combined with profit-taking after the initial takeover-driven rally and the lack of a firm offer, help explain why CMG has since decreased. Starbucks Explores CMG Deal: Smart Move or Costly Gamble?

Chipotle Mexican Grill Price Performance

Shares of Chipotle Mexican Grill stock traded down $1.04 on Friday, hitting $31.64. The company had a trading volume of 20,062,899 shares, compared to its average volume of 17,694,625. The firm has a market capitalization of $40.03 billion, a P/E ratio of 29.02, a P/E/G ratio of 1.88 and a beta of 0.96. Chipotle Mexican Grill, Inc. has a twelve month low of $28.03 and a twelve month high of $42.81. The stock has a 50-day moving average of $34.50 and a 200-day moving average of $33.55.

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

Insiders Place Their Bets

In other Chipotle Mexican Grill news, insider Matthew R. Bush sold 2,675 shares of the stock in a transaction dated Friday, August 21st. The stock was sold at an average price of $35.75, for a total transaction of $95,631.25. Following the completion of the transaction, the insider owned 21,415 shares in the company, valued at approximately $765,586.25. This represents a 11.10% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Insiders own 0.45% of the company's stock.

Chipotle Mexican Grill Company Profile

Chipotle Mexican Grill, Inc is a fast-casual restaurant company that specializes in Mexican-inspired food made with a limited number of core ingredients. Its menu includes burritos, burrito bowls, tacos, quesadillas, salads and sides, with options such as chicken, steak, barbacoa, carnitas, sofritas and vegetables. The company also offers beverages, including soft drinks and other drinks, and allows customers to customize meals.

Founded by Steve Ells in 1993, Chipotle operates company-owned restaurants under the Chipotle Mexican Grill brand.

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