The Burrito chain Chipotle Mexican Grill (CMG) reported much stronger than expected fourth quarter earnings late Wednesday.
Estimates : Chipotle earnings per share were seen ticking up 3% to $ 1.38, according to Zacks Investment Research. Revenue was estimated to climb 8% to $ 1,195 billion. Analysts expect the same store sales at the company's owned outlets to increase 4.5%, according to Consensus Metrix.
Results: Chipotle revenue jumped to $ 1.72 per share. Revenue increased by 1
View: Chipotle sees the same store growth in the middle of a figure, with 140 to 155 new restaurant openings.
Chipotle Stock Technical Analysis
The Chipotle share increased 7% to 562.86 in late trading. It signals a move to a new high and clearing a high handling alternative point of sale at 544.
Stocks closed 0.2% to 525.78 on the stock market today. It was only within easy reach of a 501.08 double-bottomed place of purchase. The 5% chase zone is 526.13.
The Chipotle store's RS line recently hit a 20-month high, but it has slipped the last few sessions. The Chipotle share has a decent IBD-composite rating of 85, but the inventory control tool shows there are reasons for concern. Its EPS rating is poor 55.
Shares of Taco Bell parent Yum Brands (YUM), reporting early Thursday, closed 0.15%. Del Taco (TACO) slipped 1.5%, and El Pollo Loco (LOCO) lost 2%.
Nevertheless, the Chipotle share is in the turnaround mode and this is improving. During the last three quarters, the burrito chain has had an average EPS growth of 39%.
Chipotle has been working to transform the image after a number of food security events have damaged the mark. In July last year, healthcare professionals determined that a type of bacteria found in food again at insecure temperatures caused an outbreak of gastrointestinal disease that affected 647 people eating at one of the chain's restaurants in Ohio. However, the management said there has been no "lasting impact" in Ohio.
Leaders also made three important actions that will help Chipotle earnings. The first is to improve digital access to make it easier for customers to order. The other enhances the ability to process multiple orders and serve multiple customers. The third makes the brand more visible with the "For Real" campaign, which highlights Chipotle's "commitment to preparing real food made with real ingredients."
Analysts Mixed on Chipotle Stock
Piper Jaffray CEO Nicole Miller Regan is bullish on Chipotle Stocks, considering it's overweight with a 550 target.
"We believe the brand is well positioned to prioritize and implement turnaround actions under a new management team, and we see a meaningful earning power that exists," she said in a research note.
But Wells Fargo Senior Analyst Jon Tower is less enthusiastic, considering what the market is doing with a 486 goal. He notified of possible price turbulence if the management provided bearish guidance.
"We expect management to get a bullish tone for sales in the first quarter (with growth in the high single numbers), as well as its outlook for 2019 (middle of some digits) given the many sales initiatives or the horizon," he in a survey note.
"We believe that any comments to the contrary are likely to give volatile share capital in the short term. Given the relatively unattractive risk / reward of the stock, we remain on the sidelines."
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