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Chipotle Mexican Grill Inc (NYSE:CMG) shares hit a new 52-week low on Tuesday, extending a marked slide as the fast-casual chain grapples with a traffic problem and persistent inflation. Here’s what investors need to know.
What To Know: The sell-off accelerated after its third-quarter report in late October, which missed revenue estimates. Chipotle posted $3 billion in revenue, falling short of the $3.02 billion analyst consensus.
While adjusted EPS of 29 cents was in line, investors focused on a bleak 0.3% growth in comparable sales and, more critically, a 0.8% decline in traffic. Restaurant-level margins also compressed to 24.5% from 25.5% a year prior.
CEO Scott Boatwright attributed the pullback to “young and lower-income consumers” feeling the squeeze. This weakness is part of a broader sector slowdown affecting CAVA and Sweetgreen.
Analysts have grown bearish, cutting price targets. KeyBanc highlighted the “sharp reversal in traffic,” while TD Cowen noted “weaker-than-expected” sales. The stock, now down 49% year-to-date, faces a penalty box status as investors question its ability to maintain growth when its core demographic cuts back.
Benzinga Edge Rankings: Underscoring the stock’s collapse, Benzinga Edge rankings show Chipotle has a dismal Momentum score of 6.99 and a negative price trend for the short, medium and long term.
CMG Price Action: Chipotle Mexican Grill shares were down 2.07% at $29.86 at the time of publication on Tuesday. The stock is trading near its 52-week low of $29.76, according to Benzinga Pro data.
Read Also: Wall Street Pauses, Silver Reclaims $50 With Shutdown End In Sight: What’s Moving Markets Tuesday?
By now you're likely curious about how to participate in the market for Chipotle Mexican Grill – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.
In the case of Chipotle Mexican Grill, which is trading at $29.86 as of publishing time, $100 would buy you 3.35 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
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Posted In: CMG
