Sell the Ackman Rally in Chipotle (CMG) - Oppenheimer
- Major stock indexes rise again to new records
- Unusual 11 Mid-Day Movers 12/8: (COOL) (TLRD) (DRAM) Higher; (SHIP) (OHRP) (MLSS) Lower
- Third-Party Said Interested in PrivateBancorp (PVTB) as CIBC (CM) Deal is Delayed
- Insys Therapeutics (INSY) Sinks as Former Employees Arrested in Racketeering Scheme
- Lower for longer, ECB scales back asset buys
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
Oppenheimer analyst Brian Bittner is telling clients to sell the Chipotle Mexican Grill (NYSE: CMG) pop following news Bill Ackman has amassed a nearly 10% stake.
Bittner commented, "We believe CMG's poor risk/reward remains problematic for shareholders. Pershing Square revealed a 9.9% ownership, but unlike other activist situations, we don't see any viable paths to financially engineer shareholder value from the boardroom. CMG remains a hopeful sales/margin rebuilding story, which is at a standstill. Unfortunately, our analysis (click here) highlights meaningful risk to Street's estimates through '18 and supports our caution. At 47x '17E P/E (35x '18E), we question Pershing's suggestion that CMG shares are "under-valued," particularly in light of diminishing returns on capital and risks to unit growth."
The firm maintained a Perform rating.
Shares of Chipotle Mexican Grill closed at $414.07 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Chipotle Mexican Grill (CMG) Active Amid Cautious Conference Comments
- SunTrust Analyst Bob Peck Leaving to Join Credit Suisse
- Chipotle (CMG) volatility comes in after company says sales haven't recovered as much as previously expected
Create E-mail Alert Related CategoriesAnalyst Comments, Trader Talk
Related EntitiesWilliam Ackman, Pershing Square Capital
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!