Held support yet again & now threatening to breakout. If successful it could run another 20+ pts again quickly
I am so in the bear camp on CMG. The recent rise is strictly caused by Ackman's accumulation, not due to any "recovery" or improved fundamentals. The only temptation I have on this right now is that I could by a long put for around 1900 bucks to sell 100 shares of this at $410 bucks a share. Won't do it, but it is tempting. Pershing Square’s Bill Ackman has started a 9.9 percent activist position in Chipotle Mexican Grill, Inc. (NYSE: CMG). Stifel’s Paul Westra reiterated a Sell rating on Chipotle, with a price target of $215. The Ackman Stake “We cannot fathom Pershing’s operational or mathematical investment thesis. Frankly, we predict that Pershing's activist effort is most likely to accelerate and further assure CMG's “tail operational risk” of increasing management and hourly turnover rates,” Westra mentioned. Related Link: Ackman's Stake In Chipotle Meaningless In The Absence Of Sales Recovery The analyst pointed out that in order to justify Chipotle’s current stock valuation, either one has to assume that the economic principal of diminishing returns doesn't apply to the brand and/or the mathematical constructs of Discounted Cash Flow don't apply to the stock. Economic Laws Don’t Apply? “The law of diminishing returns has been a core principal of economics… and is especially evident within the US restaurant business where concept profitability always follows a well-defined “market-maturation curve”,” Westra stated. Accordingly, brands usually achieve “Peak Returns” when they achieve an individual market penetration level of 50-60 percent. From here, returns decline over time. “If this pesky law applies to Brand Chipotle, then regardless of what CMG’s “new-normal” 2017-19 EPS run-rate becomes, we believe CMG will soon afterwards become a +7 percent net-income grower, forever,”
Was just thinking about Ackmann's position. The weakness in his stake is that he cannot buy any more shares (already 9.9% of the float). So CMG is up to $435, but how will he get it past $450?
Analyst Upgrade/Downgrade Update Brokerage firm: Nomura Change: Coverage Reiterated/Price Target Changed Previous Rating: Neutral Current Rating: Neutral Previous Price Target: $405 Current Price Target: $372
CMG down again today on a downgrade... Chipotle's (CMG) stock rating was cut to 'underperform' at Raymond James on Tuesday.
It's interesting that Pershing Square was approved to increase their stake in $CMG today while downgrades continue coming in.
Analyst Upgrade/Downgrade Update Brokerage firm: Raymond James Change: Downgrade Previous Rating: Market Perform Current Rating: Underperform Previous Price Target: N/A Current Price Target: N/A
Analyst Upgrade/Downgrade Update Brokerage firm: RBC Capital Mkts Change: Coverage Reiterated/Price Target Changed Previous Rating: N/A Current Rating: Outperform Previous Price Target: $485 Current Price Target: $465
Reported after close today (10/25/16) Earnings: EPS $1.32 Revenue $1B Estimates: EPS $1.59 Revenue $1.09B Down 2.01% after hours
@JerryM has been saying this was way overvalued for quite awhile now. Looks like we have our very own Analyst
Analyst Upgrade/Downgrade Update Brokerage firm: Credit Suisse Change: Downgrade Previous Rating: Outperform Current Rating: Neutral Previous Price Target: N/A Current Price Target: N/A
Analyst Upgrade/Downgrade Update Brokerage firm: Deutsche Bank Change: Coverage Reiterated/Price Target Changed Previous Rating: N/A Current Rating: Sell Previous Price Target: $340 Current Price Target: $280 Analyst Upgrade/Downgrade Update Brokerage firm: Maxim Group Change: Coverage Reiterated/Price Target Changed Previous Rating: N/A Current Rating: Sell Previous Price Target: $325 Current Price Target: $300
