Chipotle Mexican Grill (NYSE:CMG) Stock Sees Unusually High Call Option Buying

Key Points

• Unusual bullish options activity: Traders purchased 73,551 Chipotle call options, 35% above the typical volume of 54,594 contracts.
• Chipotle shares rose to $28.96 but remain near their one-year low of $27.31 and well below the 50-day and 200-day moving averages. The company’s latest quarter modestly exceeded earnings and revenue estimates, with revenue up 9.3% year over year.
• Analysts maintain a generally positive outlook, with a consensus “Moderate Buy” rating and $43.56 target price, though concerns remain about traffic growth, margins, service improvements and the strength of future guidance.

Chipotle Mexican Grill, Inc. (NYSE:CMG - Get Free Report) was the target of some unusual options trading on Wednesday. Stock traders purchased 73,551 call options on the company. This is an increase of 35% compared to the typical volume of 54,594 call options.

Chipotle Mexican Grill Price Performance

Shares of Chipotle Mexican Grill stock traded up $0.98 on Wednesday, reaching $28.96. The company had a trading volume of 13,978,465 shares, compared to its average volume of 17,880,725. Chipotle Mexican Grill has a 1 year low of $27.31 and a 1 year high of $41.42. The firm has a market cap of $36.65 billion, a price-to-earnings ratio of 26.56, a P/E/G ratio of 1.67 and a beta of 0.96. The firm's 50-day moving average price is $33.29 and its two-hundred day moving average price is $34.26.

Chipotle Mexican Grill (NYSE:CMG - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The restaurant operator reported $0.33 EPS for the quarter, topping analysts' consensus estimates 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 firm had revenue of $3.35 billion for the quarter, compared to analysts' expectations of $3.33 billion. During the same period in the prior year, the business posted $0.33 earnings per share. The business's revenue for the quarter was up 9.3% on a year-over-year basis. As a group, analysts anticipate that Chipotle Mexican Grill will post 1.14 EPS for the current year.

Chipotle Mexican Grill News Summary

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

• Positive Sentiment: RBC Capital Markets sees potential upside to Chipotle’s comparable-sales performance, citing promotional activity and stronger digital engagement as possible growth drivers. The firm’s constructive view is helping support the stock ahead of earnings. RBC flags earnings upside at Chipotle
• Positive Sentiment: Chipotle is bringing back its popular Smoked Brisket for a limited time and promoting Family Meals with a national advertising campaign. The product launch could increase restaurant traffic and average order values ahead of the earnings release. Smoked Brisket Return Could Be A Big Week For Chipotle Stock
• Positive Sentiment: Wall Street analysts collectively rate CMG “Moderate Buy,” providing some support after the shares recently touched a 52-week low. Chipotle Stock Now Rated Moderate Buy
• Neutral Sentiment: Investors are focused on third-quarter sales growth, customer traffic, digital orders, margins and management’s outlook. The report will indicate whether Chipotle’s recent weakness reflects an overly pessimistic valuation or deteriorating fundamentals. Chipotle Q3 earnings: Sales growth, traffic trends in focus
• Negative Sentiment: Analysts caution that even an earnings beat may not provide enough of a catalyst. CEO Scott Boatwright is under pressure to improve service speed, the customer experience and promotional effectiveness while restoring traffic growth. Chipotle’s Stock Needs a Jolt
• Negative Sentiment: Broader comparisons with McDonald’s highlight ongoing concerns about restaurant traffic, operating margins and whether Chipotle’s growth strategy can justify its valuation. Investors may therefore react more strongly to forward guidance than to headline quarterly results. McDonald’s vs. Chipotle

Analysts Set New Price Targets

Several equities analysts have commented on the stock. BTIG Research reiterated a "buy" rating and issued a $45.00 price objective on shares of Chipotle Mexican Grill in a report on Wednesday, August 5th. Seaport Research Partners began coverage on shares of Chipotle Mexican Grill in a research note on Wednesday, September 16th. They issued a "neutral" rating on the stock. Raymond James Financial cut their price target on Chipotle Mexican Grill from $42.50 to $37.00 and set an "outperform" rating for the company in a research note on Friday, October 16th. Citigroup reduced their target price on Chipotle Mexican Grill from $45.00 to $43.00 and set a "buy" rating on the stock in a research note on Monday, October 19th. Finally, UBS Group reaffirmed a "buy" rating on shares of Chipotle Mexican Grill in a research note on Friday, October 9th. Twenty-seven analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the company. According to data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus target price of $43.56.

Insider Activity at Chipotle Mexican Grill

In other news, insider Matthew R. Bush sold 2,675 shares of Chipotle Mexican Grill stock in a transaction that occurred on Friday, August 21st. The shares were sold at an average price of $35.75, for a total transaction of $95,631.25. Following the completion of the sale, the insider owned 21,415 shares in the company, valued at $765,586.25. The trade was a 11.10% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Company insiders own 0.45% of the company's stock.

Institutional Investors Weigh In On Chipotle Mexican Grill

A number of hedge funds have recently modified their holdings of the business. Parcion Private Wealth LLC lifted its stake in shares of Chipotle Mexican Grill by 29.7% in the 3rd quarter. Parcion Private Wealth LLC now owns 9,271 shares of the restaurant operator's stock valued at $296,000 after purchasing an additional 2,123 shares during the last quarter. United Asset Strategies Inc. acquired a new stake in shares of Chipotle Mexican Grill in the 3rd quarter valued at about $858,000. Choreo LLC boosted its stake in Chipotle Mexican Grill by 5.6% during the 3rd quarter. Choreo LLC now owns 25,514 shares of the restaurant operator's stock worth $815,000 after purchasing an additional 1,344 shares during the period. D.A. Davidson & CO. raised its stake in Chipotle Mexican Grill by 2.2% during the 3rd quarter. D.A. Davidson & CO. now owns 92,885 shares of the restaurant operator's stock valued at $2,968,000 after acquiring an additional 2,021 shares during the last quarter. Finally, Motley Fool Asset Management LLC grew its position in Chipotle Mexican Grill by 4.3% in the 3rd quarter. Motley Fool Asset Management LLC now owns 106,476 shares of the restaurant operator's stock valued at $3,402,000 after buying an additional 4,435 shares during the last quarter. 91.30% of the stock is currently owned by institutional investors and hedge funds.

Chipotle Mexican Grill Company Profile

Chipotle Mexican Grill, Inc NYSE: CMG operates a chain of fast-casual restaurants focused on Mexican-inspired food. Its menu includes burritos, burrito bowls, tacos, quesadillas and salads, with options such as chicken, steak, barbacoa, carnitas, sofritas and vegetables. The company emphasizes preparing food in its restaurants from ingredients it describes as responsibly sourced, including meats raised with attention to animal welfare and produce from selected suppliers.

Founded by Steve Ells in 1993, Chipotle opened its first restaurant in Denver, Colorado.

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