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$CMG a solid long term option.

It’s time to talk about one of the best known restaurant brands in the country. Here is the breakdown on $CMG, otherwise known as Chipotle Mexican Grill.

Current Price: $1313.73

52/Wk High: $1384.4612

52/Wk Low: $415.00

Read below for the breakdown.

Chipotle Mexican Grill is one of the best known restaurant brands in the nation and while it would seem COVID-19 could cause setbacks the result has been just the opposite. 

Chipotle Mexican Grill stock has been on the roll and while COVID-19 could have some adverse effects, $CMG continues to grow,

Not only that, but analysts are bullish for good reason as well. For instance, Wedbush analysts raised their price target for $CMG, citing growth in digital and delivery orders.

As of the Q2 report $CMG reported encouraging numbers. $CMG reported that since the March lows, the company retained 70% to 80% of digital sales gains and recovered 40% to 50% of in store sales. 

Adding to the positivity, digital sales were reported to be up 216% YOY, which now makes up 61% of total sales as of Q2.

If it couldn't get any better, $CMG reported throughout the Q2 report that deliveries were up 125% and order ahead of pickup also grew 140%.

While Chipotle Mexican Grill did not introduce guidance, management expects no further business troubles due too COVID-19.

Digging into the last earnings report, $CMG did beat the low expectations. $CMG reported a Q2 EPS of $0.40 versus the expected EPS consensus of $0.35. Furthermore, Q2 revenue held steady and came in at a solid $1.4 billion.

When exploring the balance sheet, Chipotle’s financial standing is darn near exceptional. With zero debt on the table and a solid $907 million in cash on hand as of June 30th, $CMG has managed the effects of COVID-19 well.

While earnings were better than expected the analysts continue to be mixed. The current mean price target sits at $1,256/share, representing a disappointing -4.37% downside.

On the other hand, the high price target is $1,600/share, representing a 21.79% gain and the low price target is $751.00/share, representing a -42.83% loss.

The big money on the other hand is very bullish and does not seem to be letting up. Currently, 96.16% of $CMG is owned by institutions. Top holders include BlackRock Institutional Trust, Capital International Investors, and Pershing Square Capital Management.

$CMG also trades at a high 145.80x price to earnings multiple and a 6.54x price to sales ratio. 

When taking a look at the charts the stock has definitely run a lot but is not unattractive. Currently the six month RSI sits at 62.82, which is high but as we know, RSI is not everything.

Furthermore, the six month MACD sits at 45.55 and seems to be in the midst of a possible change in momentum. The six month CCI also sits at a high 69.97.

While several chart multiples sit higher over the past six months, the stock has pulled back since mid last week and currently trades $65.4612 off its highs.

Overall I like $CMG very much for the long term. With an outstanding pattern of growth, increasing digital sales, and a fenomenal balance sheet its hard to find a reason to go against the stock.

In the short term shares could become cheaper depending on market direction, but the overall direction should continue to be northbound.


Disclaimer: This is not financial advice, simply opinion based on independent research. Luke Donay and Running With The Money are not responsible for any investment made based on published information. 

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