Chipotle Shares Holding $400 Level
Chipotle Mexican Grill (NYSE:CMG) has found some recent strength as of 2017 staying above $400 on pipe dreams the business is recovering from its highly reported E. Coli disaster. The question now becomes will the anaysts covering the stock come to the rescue and support a $400+ price target?
CMG shareholders received good news this week when Wall Street learned the company expects a fourth-quarter same-store sales decline of 4.8%. The company said same-store sales decreased 20.2% in Oct. 2016, decreased 1.4% in Nov. 2016, and increased 14.7% in Dec. 2016. That Dec. increase sent shares to $418 from $395 the prior week. Any kind of good news has a big impact on CMG thanks to its high 17% short interest. Most traders don't believe CMG is ready to turn around yet and the short interest is a good indication.
CMG at $408 today puts the stock 5% above its 20 and 50 day moving averages. It is now just 1% under the 200 day moving average. That means it has support at this level and techincally the stock should remain and begin to move higher. What could move the stock higher is the analyst coverage and less of Bill Ackman's threats or headlines (recall he has close to a 10% stake in CMG).
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