Surveys Say More Upside Ahead for Chipotle Stock

We're getting used to writing about bullish analyst notes on Chipotle

We try to diversify our coverage of stocks, but certain trends are too hard to ignore. That's been the case for Chipotle Mexican Grill, Inc. (NYSE:CMG), which continues to receive one positive analyst review after another. This morning it was Stifel that weighed in, saying in a note that a recent survey suggests the burrito chain could keep outperforming in the short term, and in response, boosted its price target on CMG by a whopping $200 to $700. Stifel also lifted its 2019 and 2020 earnings per share estimates for the company, and, according to Thomson Reuters Eikon, is the fifth brokerage firm to lift its outlook on Chipotle in the past month.

Stifel wasn't the only firm to mention CMG in a note, however, as Loop Capital also cited a survey that points to more strength in the casual dining space. In response, Loop reiterated its "buy" recommendation on the security. Theoretically, there's potential for more bull notes on Chipotle, since the majority of analysts in coverage still have "hold" or worse recommendations in place.

The security was last seen trading at $707, right below its April 1 annual high of $715.62. The shares have more than doubled in the past 12 months. As such, some shareholders may be using put options to protect their paper profits, since data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day put/call volume ratio of 1.01. It is extremely rare to see put buying be more popular than call buying on CMG, evidenced by the reading's annual percentile rank of 91%.

Meanwhile, the Schaeffer's Volatility Index (SVI) comes in at 23%, and is only 4 percentage points from a 12-month bottom. Said differently, volatility expectations look quite muted right now on Chipotle, which may be enticing for those looking to buy premium.