By Peet Serfontein & Motheo Tlhagale
Chipotle Mexican Grill owns and operates Chipotle Mexican Grill restaurants, which feature a menu of burritos, burrito bowls, quesadillas, tacos, and salads. The company operates close to 3 500 restaurants, mainly in the United States (US).
Over the last few years, Chipotle has gained market share in the US quick-service restaurant space, with same-store sales outpacing peers on the back of a solid loyalty and marketing approach and strong digital order growth. The company boasts an exceptionally strong balance sheet with no debt and over $2 billion in cash.
Technically, the early formation of wave five of the Elliott Wave structure presents a promising investment opportunity as it typically represents the final upward leg in a five-wave impulse sequence. Identifying the early stages of wave five can offer a strategic entry point for investors looking to capitalise on the last leg of the trend before a potential larger correction unfolds.
Typical second-half seasonal strength also supports a bull case for the stock (see the insert).
Additionally, a price that remains above support presents a promising investment opportunity (see the black trendline on the main chart). The price also seems to be in the accumulation phase of the Wyckoff price cycle. During this time, informed institutional investors often begin quietly accumulating positions in anticipation of a future upward move.
The price is approaching its 200-day simple moving average (SMA) from below, suggesting improving sentiment and a potential trend reversal.
Further support comes from signs of upside momentum. The MACD histogram shows a clear acceleration in upward momentum, while the recent upward trajectory of the On-Balance Volume (OBV) indicator suggests that buying pressure is increasing.
| Share Information | |
|---|---|
| Share Code | CMG |
| Industry | Consumer Services |
| Market Capital (USD) | 73.63 billion |
| One Year Total Return | -16.77% |
| Return Year-to-Date | -9.37% |
| Current Price (USD) | 54.65 |
| 52 Week High (USD) | 66.74 |
| 52 Week Low (USD) | 44.46 |
| Financial Year End | December |
| The price is approaching its 200-day simple moving average, supporting a bullish case for the stock. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (USD) | 1.12 | 1.21 | 1.45 | 1.71 |
| Growth (%) | 8.39 | 19.44 | 17.66 | |
| Dividend Per Share (USD) | 0.00 | 0.00 | 0.00 | 0.00 |
| Growth (%) | ||||
| Forward PE (times) | 45.02 | 37.69 | 32.03 | |
| Forward Dividend Yield (%) | 0.00 | 0.00 | 0.00 | |
| High-single-digit earnings growth is expected over FY25. The stock holds a Beta of 1.03, which indicates that the price moves closely to the broader market. | ||||
Buy/Sell Rationale:
Technical Analysis:
Long-term fundamental view
| Share Name and Position | PANW US - Time exit (Close the position) |
CTAS US - Time exit (Close the position) |
DECK US - Time exit (Close the position) |
|---|---|---|---|
| Entry | 173.55 | 205.84 | 109.15 |
| Current | 201.69 | 223.20 | 102.20 |
| Movement | +16.2% | +8.4% | -6.3% |
| The share reached our time exit date and we closed the position, locking in solid gains. | The share reached our time exit date and we closed the position, locking in solid gains. | The share reached our time exit date and we closed the position. | |
| Share Name and Position | SW US - Buy (Continue to hold) |
ETN US - Buy (Continue to hold) |
MET US - Buy (Continue to hold) |
| Entry | 39.56 | 334.86 | 79.32 |
| Current | 43.50 | 343.26 | 79.66 |
| Movement | +10.0% | +2.5% | +0.4% |
|
A trough in the Elliott wave theory remains of interest. Remains below its 200-day SMA. Fading downside price momentum is supportive.
Our profit target remains $49.00 with a trailing stop-loss at $42.00. Exit the trade around 20 August 2025. |
The price recently touched the lower Bollinger band. Remains above its 200-day SMA. Fading downside price momentum is supportive.
Our profit target remains $352 with a trailing stop-loss at $276. Exit the trade around mid-December 2025. |
A developing rising wedge pattern remains of interest. Trading just below its 200-day SMA. Upside price momentum reinforces a bullish trade thesis.
Our profit target is maintained at $89.00, with a trailing stop loss set at $74.00. Exit the position on or around 29 August 2025. |
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