Chipotle stock is trading near the round $300 level
Chipotle Mexican Grill, Inc. (NYSE:CMG) shares sank yesterday amid news one of its restaurants in Los Angeles is being investigated by public health officials following customer complaints of illness. Despite this, RBC this morning weighed in by raising its price target on CMG stock to $330 from $320 -- calling for a 10.5% increase from last night's close of $298.67, and a move back up to familiar resistance.
Otherwise, analysts are overwhelmingly bearish on the fast casual dining concern. There are 27 brokerage firms who cover Chipotle, and just four of them say it's worth buying. Meanwhile, its average 12-month price target stands at $317.26, which is just above where it was trading before yesterday's pullback.
Sentiment has been more upbeat in the options pits. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) reveals a 10-day call/put volume ratio of 1.34, topping 84% of readings from the past year, meaning call buying has been more popular than normal. Of course, with roughly one-fifth of CMG's float sold short, some of this activity could be short sellers using options to hedge.
The shares have given investors little reason to be optimistic over the past year, giving back 24% and touching a nearly five-year low of $263 on Nov. 13. Plus, the stock's recent really was quickly contained by its 120-day moving average, which coincides with the $320-$330 region -- an area the equity has struggled to overcome since mid-August. At last check, CMG shares were trading down 1.2% at $295.