Chipotle Mexican Grill Shares Make New Highs After Q4 Earnings Results

Published on Thursday, 02 February 2012 14:09 Written by J Hawk

New York, February 1^st (TradersHuddle.com) – Denver, Colorado based restaurant company Chipotle Mexican Grill (NYSE: CMG) yesterday posted net income results of $177 million. This represented diluted earnings per share of $1.81 for the fourth quarter that concluded on December 31^st of 2011.

The announced net income result of $57.5 million reflected a rise of 23.7 percent compared to the net income of $46.4 million the company reported in the same quarter of 2010. Nevertheless, the firm’s earnings per share result was slightly less than the consensus of $1.83 per share, according to a survey of market analysts performed by Zacks Investment Research.  

On balance, the stock market responded at the opening bell by taking Chipotle Mexican Grill’s shares to a new all-time high at the $373.37 level on its latest earnings results released late yesterday. Nevertheless, profit taking subsequently set in to send the shares as low as $363.51 during the session.

The firm’s share price has since recovered somewhat to trade at the $365.34 level as of this writing, and is currently showing a modest loss of -1.37% on the day or -$5.07 in more active than usual trading of just over 500,000 shares on the New York Stock Exchange.

Chipotle Mexican Grill’s Revenues Boosted by Restaurant Openings, Higher Traffic and Price Rises

The innovative and environmentally sensitive Mexican flavored fast food dining company’s quarterly revenue came in at $596.7 million, which was also an increase of 23.7% from the same period of the previous year that had shown revenues of $482.5 million.

The firm attributed much of its substantial revenue growth to having opened 67 new restaurants during the last quarter.

On a comparable restaurant sales basis, Chipotle Mexican Grill showed a less notable 11.1 percent rise in revenue. According to the company, this sales gain was ascribed to higher restaurant traffic in Q4 of 2011, plus the effect of menu item price rises that had occurred during the period from March to August of 2011.

Co-CEO, Chair and Founder Steve Ells Highlights CMG’s Mission and Sourcing Approach

Chipotle Mexican Grill’s co-CEO, Chairman and founder Steve Ells said about his firm’s earnings results and strategy that, "During 2011, we remained focused on our mission to change the way the world thinks about and eats fast food, while continuing to strengthen our people culture and our unit economic model.”

Co-CEO Ells went on to note that, “Our success is rooted in serving great tasting food and it has been since day one. Our sourcing of food made from the finest ingredients, which is raised with respect for the animals, the environment, and the farmers, is at the heart of that effort.”

The Technical Picture for Chipotle Mexican Grill Remains Bullish Overall After New Highs

From a technical perspective, Chipotle’s (NYSE: CMG) share price has shown a generally upward trending pattern over the past few years, rising almost exponentially off of a solid base of support noted at the $36.86 level last seen in November of 2008. The stock currently trades just below its all-time high of $373.37 that was seen in the early part of today’s trading session.

Given the stock’s subsequent sharp pull back on profit taking activity that broke through initial support seen at the $365.21 level, the stock may well be in for a temporary period of consolidation or additional corrective activity to the downside in the near term.

With that noted, the ongoing spectacular rally in CMG should eventually have further to go, provided that strong support ahead of the psychological $300.00 level and trendline support continues to hold.

In addition, intervening support shows up at the $359.48, $354.10, $352.63 and $336.29 levels, while key resistance is noted at the all-time high of $373.37, which needs to break to indicate that additional upside is likely for the stock.