Option Trade 
Chipotle Mexican Grill, Inc. (NYSE:CMG) Puts 
Tuesday, 02 February, 2016

**OPTION TRADE: Buy the CMG Feb 2016 450.000 put (CMG160219P00450000) at approximately $13.00. Place a pre-determined sell at $30.00.

Note: Keep a tight protective stop loss -- make it $10.00.

by Ian Harvey

February 02, 2016

Chipotle Mexican Grill, Inc. (NYSE: CMG), a developer and operator of Chipotle Mexican Grill restaurants, which serve a focused menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads, will report Q4 earnings today, Tuesday, February 2nd, after market close. Analysts expect the company to post earnings per share of $1.87 on revenue of $1.01 billion, down from the same quarter of last year in which the company posted earnings of $3.84 on revenue of $1.07 billion.

These decreases are due to the E. coli nightmare that Chipotle seemed unable to wake up from this quarter. What started a few months ago with a handful of incidents in Oregon slowly spread across the country. Two weeks ago, CEO Steve Ells said he was “hopeful” that the CDC would announce the official end of the outbreaks. Ells said, “We know that Chipotle is as safe as it’s ever been before.” However, analysts are bracing for this to take a toll on the company’s sales and margins. Investors are hoping for a strong outlook that proves the company can put this episode behind it. Aside from the virus outbreak, analysts are also wary of the impact that rising beef costs will have on earnings.

Chipotle Mexican Grill opened at 472.64 on Monday. The firm has a market cap of $14.74 billion and a price-to-earnings ratio of 28.20. Chipotle Mexican Grill has a 12 month low of $399.14 and a 12 month high of $758.61. The firm’s 50-day moving average price is $473.38 and its 200-day moving average price is $631.83.

Chipotle Mexican Grill, Inc. last issued its quarterly earnings results on Oct 20, 2015. The company reported $4.59 EPS for the quarter, missing the analyst consensus estimate by $ -0.03. Analyst had a consensus of $4.62. The company had revenue of $1217.00 million for the quarter, compared to analyst’s expectations of $1216.88 million. The company’s revenue was up 12.2% compared to the same quarter last year. During the same quarter in the previous year, the company posted $4.15 EPS.

Chipotle Mexican Grill, Inc. has received a short term rating of strong sell from research analysts at Zacks Investment Research with a rank of 5.

Many other Wall Street Analysts have advised on Chipotle Mexican Grill, Inc -- CMG was Reiterated by Citigroup on Jan 19, 2016 to Buy, Lowers Price Target to $ 551 from a previous price target of $698 -- Chipotle Mexican Grill, Inc. was Reiterated by Wedbush on Jan 7, 2016 to Neutral, Lowers Price Target to $ 450 from a previous price target of $500 -- Chipotle Mexican Grill, Inc. was Reiterated by Telsey Advisory Group on Jan 7, 2016 to Market Perform, Lowers Price Target to $ 448 from a previous price target of $555 .

6 analysts have added the shares in their list of strong buys. 2 stock experts have also rated a buy. 17 broker firms have advised hold. A sell call was initiated by 1 analyst.

Harvey’s Options Volatility Indicator

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

**OPTION TRADE: Buy the CMG Feb 2016 450.000 put (CMG160219P00450000) at approximately $13.00. Place a pre-determined sell at $30.00.

Note: Keep a tight protective stop loss -- make it $10.00.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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