As Amazon, Microsoft and Google-parent Alphabet announce massive layoffs in the tech sector, Chipotle Mexican Grill looks to fill 15,000 jobs in preparation for the typically-heavy March-to-May burrito season. Meanwhile, CMG stock focuses on wrapping up a fresh breakout as it uses Snapchat, owned by Snap, to kick off 2023 with a new augmented reality experience.
As it spices up a new buy zone from a 1,638.43 buy point in a double-bottom base, the burrito king earns a spot on the IBD Breakout Stocks Index.
CMG stock sports a 97 Composite Rating, meaning it's outpacing 97% of all stocks in terms key stock-picking traits.
High marks in IBD Stock Checkup put Chipotle at the head of the table among restaurant stocks. Other group leaders include Restaurant Brands, Wingstop, Nathan's Famous and Texas Roadhouse.
How Did Your Online Broker Do In IBD's 2023 Best Online Broker Survey?
Chipotle Serves Augmented Reality Lifestyle With Snapchat
While Chipotle prides itself on keeping it (and its food) real, the company has no qualms about venturing into augmented reality (AR).
To start the new year, Chipotle announced a new lineup of Lifestyle Bowls and a wellness-inspired AR Lens on Snapchat to encourage fans to maintain healthy habits.
The chain of roughly 3,100 restaurants notes that the recent definition of health has shifted away from diet culture.
Millennial and Gen Z consumers have moved to individualized, holistic views of wellness. "We're making New Year's resolutions fun by gamifying the experience and offering balanced meals made with real ingredients that you feel good eating," said Chris Brandt, Chipotle's chief marketing officer.
The new Lifestyle Bowls lineup includes a Veggie Full Bowl, Plant-Powered Bowl, Go Half Veggie Bowl and four other offerings.
To spur Millennials and the Gen Z crowd to stick to their New Year's resolutions, Chipotle launched the AR Lens on Jan. 13 — known as Quitter's Day.
Wall Street Forecasts Healthy 60% EPS Growth For Q4
With over 100,000 employees, and eateries in the United States, Canada, United Kingdom, France and Germany, Chipotle is the only restaurant of its size that owns and operates all locations. The Fortune 500 member made Fortune's Most Admired Companies list for 2022.
Chipotle is on deck to report Q4 and full-year earnings Feb. 7. Analysts expect 60% earnings growth for the quarter and a 31% increase for 2022. Wall Street forecasts 28% EPS growth in 2023.
Chipotle has maintained solid double-digit sales growth, ranging from 12% to 39% across the last eight quarters. The company has delivered over $2 billion in revenue in each of the last three quarters.
CMG Stock Taste-Tests Fresh Buy Point
With earnings on next week's menu, Chipotle has just cleared a 1,638.43 buy point. The stock showed resilience Wednesday, retreating below then rebounding back above the entry to close in the buy zone.
The current double bottom base follows a failed, 49-week long cup with handle. The long period of consolidation reflects the challenge of the traumatic 2022 bear market.
The chart for CMG stock clearly shows those scars. But compared to Microsoft, Amazon, GOOGL stock and many other tech names, Chipotle is showing encouraging technical action. (Note that MSFT, AMZN and GOOGL all jumped Wednesday, building on their attempted rebounds.)
Chipotle is above its 21-day, 50-day and 200-day moving averages. In a sign of rebounding technical strength, the 50-day line is back above the 200-day benchmark. Plus, the 21-day exponential moving average has climbed back above the shorter-term 50-day line.
While still shy of a 52-week high, the relative strength line is trending upward as Chipotle's buy point nears, a sign of market leadership.
Keep in mind that it's risky to buy stocks just before they report. But see if Chipotle Mexican Grill dish up a strong earnings report, pushing CMG stock into a buy zone in heavy volume.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or rather than, buying individual stocks. Learn more here about the ETF and Innovator funds.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
