Chipotle Mexican Grill Inc
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Consumer Discretionary : Hotels, Restaurants & Leisure | Large Cap Growth
Company profile

Chipotle Mexican Grill, Inc. (Chipotle), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. The Company's Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company managed its operations and restaurants based on 11 regions. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts. As of December 31, 2016, 29 of its restaurants were located outside of the United States, with 17 in Canada, six in the United Kingdom, five in France and one in Frankfurt, Germany. The Company sells gift cards, which do not have an expiration date. The Company categorizes its restaurants as end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other.

Closing Price
$921.94
Day's Change
8.99 (0.98%)
Bid
--
Ask
--
B/A Size
--
Day's High
923.50
Day's Low
908.58
Volume
(Light)
Volume:
366,822

10-day average volume:
559,910
366,822

UPDATE: Netflix and Twitter are on a list of tech stocks that have gotten cheaper in the past year

6:57 am ET January 10, 2020 (MarketWatch)
Print

By Philip van Doorn, MarketWatch

The price-to-earnings valuation for the S&P 500 technology sector has never been higher over the past 15 years

Technology stocks have had an amazing ride. But some, including Netflix and Twitter, are less expensive relative to earnings estimates than they were a year ago.

You are no doubt aware that 2019 was an excellent year for U.S. stocks. Still, a breakdown of the 11 sectors of the S&P 500 Index might raise an eyebrow:

S&P 500 sector Total return - 2019

Information Technology 50.3%

Communications Services 32.7%

Financials 32.1%

Industrials 29.4%

Consumer Discretionary 27.9%

Consumer Staples 27.6%

Utilities 26.3%

Materials 24.6%

Real Estate 24.0%

Health Care 20.8%

Energy 11.8%

S&P 500 Index US:SPX 31.5%

Dow Jones Industrial Average US:DJIA 25.3%

The information technology sector led by a mile.

Regarding the broader market, Goldman Sachs analysts led by David Kostin wrote in their Weekly Kickstart report Jan. 3: "Valuation expansion accounted for 92% of the appreciation" of the S&P 500 during 2019. That simply means that investors were willing to pay more for stocks, because earnings growth didn't drive prices.

S&P Global Market Intelligence estimates that weighted aggregate earnings per share for the S&P 500 increased only 0.01% last year.

The Goldman analysts expect S&P 500 earnings per share (EPS) to increase 6% in 2020, driving a modest 5% gain for the benchmark index. Click here (http://www.marketwatch.com/story/this-basket-of-dividend-growth-stocks-can-help-your-portfolio-stand-out-in-2020-2020-01-07) for more about that report and a basket of dividend stocks the analysts listed.

Big increase in tech valuation

Here's a 15-year chart showing rolling 12-month forward price-to-earnings ratios for the S&P 500 information technology sector and the broader S&P 500:

The tech sector is trading for about 22 times forward earnings estimates, up from 15.7 a year ago. For the broader S&P 500, the current valuation was exceeded only briefly, early in 2018.

Then again, we cannot say the current valuation levels are anywhere near as insane as they were 20 years ago, as the dot-com bubble got closer to bursting:

Tech stocks with lower forward P/E ratios

There are 70 companies in the S&P 500 information technology sector. But the sector doesn't really include every company that the typical investor would consider a technology player. So we added social-media companies, video-game developers and internet services companies, such as Amazon.com (AMZN), to bring our "technology" list up to 80 companies.

Among these companies, only 11 have lower forward price-to-earnings ratios than they did a year ago, based on consensus earnings estimates among analysts polled by FactSet. Here they are, sorted by total returns over the past year (with dividends reinvested):

Company Ticker Total return - 12 months through Jan. 8 Total return - 2019 Forward P/E Forward P/E - year ago

Autodesk Inc. US:ADSK 42% 43% 47.4 52.4

Hewlett Packard Enterprise Co. US:HPE 8% 24% 8.5 8.7

Netflix Inc. US:NFLX 6% 21% 67.6 98.1

Oracle Corp. US:ORCL 15% 19% 13.3 13.5

Twitter Inc. US:TWTR 4% 12% 36.6 37.2

HP Inc. US:HPQ 2% 4% 9.4 9.7

Expedia Group Inc. US:EXPE -6% -3% 16.2 18.3

Arista Networks Inc. US:ANET -3% -3% 24.2 25.2

Juniper Networks Inc. US:JNPR -11% -6% 13.1 14.0

F5 Networks Inc. US:FFIV -17% -14% 13.3 15.4

Alliance Data Systems Corp. US:ADS -32% -24% 5.8 6.7

Source: FactSet

You can click on the tickers for more about each company, including business profiles.

Valuations for rapidly growing Autodesk (ADSK), Netflix (NFLX) and Twitter (TWTR) are still high relative to the tech sector. The majority of sell-side analysts covering Autodesk and Netflix are still positive on the stocks. However, their 12-month price targets aren't much higher than the current prices, as you can see on the third table.

Leaving the group in the same order, here are sales and earnings-per-share results for the past 12 reported months, from the year-earlier 12-month period:

Company Ticker Sales - past 12 reported months ($mil) Sales - year-earlier 12-month period ($mil) Change in sales EPS - past 12 reported months EPS - year-earlier 12-month period Change in EPS

Autodesk Inc. US:ADSK $3,099 $2,394 29% $0.66 -$1.46 N/A

Hewlett Packard Enterprise Co. US:HPE $28,901 $30,876 -6% $0.78 $1.15 -33%

Netflix Inc. US:NFLX $18,876 $14,893 27% $3.13 $2.79 12%

Oracle Corp. US:ORCL $39,582 $39,682 0% $3.15 $1.02 209%

Twitter Inc. US:TWTR $3,361 $2,865 17% $2.05 $1.35 52%

HP Inc. US:HPQ $58,331 $58,131 0% $2.06 $3.25 -37%

Expedia Group Inc. US:EXPE $11,879 $10,983 8% $3.34 $2.89 16%

Arista Networks Inc. US:ANET $2,454 $2,024 21% $9.49 $3.08 208%

Juniper Networks Inc. US:JNPR $4,418 $4,706 -6% $1.06 $0.67 58%

F5 Networks Inc. US:FFIV $2,242 $2,161 4% $7.09 $7.35 -4%

Alliance Data Systems Corp. US:ADS $6,176 $6,308 -2% -$2.00 $17.14 N/A

Source: FactSet

Here's a summary of sell-side analysts' opinions about these tech companies:

Company Ticker Share 'buy' ratings Share neutral ratings Share 'sell' ratings Closing price - Jan. 8 Consensus price target Implied 12-month upside potential

Autodesk Inc. US:ADSK 73% 19% 8% $189.95 $191.68 1%

Hewlett Packard Enterprise Co. US:HPE 30% 61% 9% $15.76 $17.23 9%

Netflix Inc. US:NFLX 63% 26% 12% $339.26 $365.72 8%

Oracle Corp. US:ORCL 22% 69% 9% $54.13 $56.20 4%

Twitter Inc. US:TWTR 27% 59% 14% $33.05 $34.11 3%

HP Inc. US:HPQ 14% 86% 0% $20.93 $20.73 -1%

Expedia Group Inc. US:EXPE 52% 48% 0% $108.62 $129.35 19%

Arista Networks Inc. US:ANET 37% 60% 3% $206.98 $215.33 4%

Juniper Networks Inc. US:JNPR 21% 58% 21% $24.11 $26.14 8%

F5 Networks Inc. US:FFIV 30% 60% 10% $136.44 $155.21 14%

(MORE TO FOLLOW) Dow Jones Newswires

January 10, 2020 06:57 ET (11:57 GMT)

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