Chipotle Mexican Grill feels that tariffs on Mexican imports could raise costs and squeeze margins.
The chain of fast casual restaurants told CNBC that if U.S. President Donald Trump’s proposed tariffs on goods imported from Mexico gets implemented, the company’s costs could increase by $15 million in 2019, while its margins could get slashed by 20 to 30 basis points.
CFO Jack Hartung mentioned in a statement that Chipotle might consider covering the higher costs through a “modest” price hike on their items, among other potential solutions - should the tariffs become permanent.
Hartung emphasized that the company is committed to its “integrity principles”. He indicated that while premashed or processed avocados would probably be cheaper, the company would continue to use fresh ingredients as it is unwilling to short-change customers on quality and taste.
The tariffs on Mexican imports could gradually increase and could potentially get to as high as 25% this year, if Trump ends up implementing his plan.
On May 17, 2024, the Stochastic Oscillator for CMG moved out of oversold territory and this could be a bullish sign for the stock. Traders may want to buy the stock or buy call options. Tickeron's A.I.dvisor looked at 49 instances where the indicator left the oversold zone. In of the 49 cases the stock moved higher in the following days. This puts the odds of a move higher at over .
The Momentum Indicator moved above the 0 level on May 14, 2024. You may want to consider a long position or call options on CMG as a result. In of 69 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where CMG advanced for three days, in of 353 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 363 cases where CMG Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The 10-day RSI Indicator for CMG moved out of overbought territory on May 13, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 50 similar instances where the indicator moved out of overbought territory. In of the 50 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Moving Average Convergence Divergence Histogram (MACD) for CMG turned negative on May 14, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CMG declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
CMG broke above its upper Bollinger Band on April 25, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 84, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. CMG’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: CMG's P/B Ratio (26.247) is very high in comparison to the industry average of (4.888). P/E Ratio (68.590) is within average values for comparable stocks, (52.232). Projected Growth (PEG Ratio) (2.777) is also within normal values, averaging (2.027). CMG has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.035). P/S Ratio (8.711) is also within normal values, averaging (3.575).
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
an operator of fast-casual, fresh Mexican food restaurants
Industry Restaurants