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Actionable news in CMG: CHIPOTLE MEXICAN GRILL Inc,

Chipotle Seems Positioned To Beat Q3 Revenue Estimates

Chipotle likely experienced macroeconomic tailwinds in the quarter, as the restaurant service economy in the United States continues to be healthy according to several indicators.

Chipotle is the second most preferred restaurant among teens between 13 and 19 years of age, behind only Starbucks.

We believe that a strong QSR spending economy in the US will create enough tailwinds to generate at least flat unit sales and push revenue higher than estimates.

CMG's valuation has been rich for some time now, and an evolving short thesis is battled by continual earnings surprises and subsequent share price appreciation.

Chipotle Mexican Grill (NYSE:CMG) is set to announce Q3 earnings on Tuesday, October 20, after the market closes. Analysts are looking for revenues of $1.22 billion, roughly 12% Y/Y growth, and we believe Chipotle is set to beat that estimate. Although valuation remains a concern, we do believe a strong revenue beat could drive solid share price appreciation.

Chipotle likely experienced macroeconomic tailwinds in the quarter, as the restaurant service economy in the United States continues to be healthy according to several indicators. According to the US Department of Commerce's monthly Retail Trade Report, food services and drinking places continued to see healthy sales growth in September 2015. Sales advanced 0.7% M/M and 7.9% Y/Y in September 2015. For the trailing three month period (July through September 2015), food services and drinking places saw sales surge 8.1% Y/Y, the fastest sales growth of any segment covered in the Retail Trade Report by several basis points (second fastest growing segment was Auto Dealers with 7.4% Y/Y growth). Confirming strength in the industry was a Black Box Intelligence report which said restaurant comps rose 1.5% in Q3. While this is a slowdown from the 1.8% comps in Q2, the report does confirm that restaurant...


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