Chipotle (CMG) Has Had Multiple, Negative Catalysts

Larry Ramer

Tue, Apr 1, 2025, 9:46 AM 2 min read

Chipotle (CMG) precocious deed 52-week lows, and the shares are down 15% truthful acold successful 2025. The institution has been wounded by weakening user assurance and a " skimpy portions scandal," portion investors person been tense astir the interaction of looming avocado tariffs connected the firm, Investopedia's Caleb Silver told Schwab Network recently.

Further, Schwab commentator Tom White unveiled an options strategy involving CMG stock.

A cook plating up a wide assortment of dishes for a edifice chain.

CMG's Negative Catalysts

Amid weakening user sentiment, immoderate Americans whitethorn person stopped eating astatine Chipotle, whose meals outgo $17-$18, Silver stated. Additionally, the Trump medication could levy tariffs connected avocadoes tomorrow, negatively impacting CMG's bottommost line, helium said. Finally, the institution was progressive successful an allegation of "skimpy portions" past summer, forcing it to supply its customers with much nutrient and somewhat reducing its margins, the commentator noted.

A Slightly Bullish Options Strategy

Investors who judge that CMG banal tin beforehand somewhat up of and aft its Q1 earnings, slated to beryllium unveiled connected April 23, tin bargain April 25 telephone options with a $48 onslaught price, White stated. Investors who travel the strategy would interruption adjacent astatine $51.90, helium said.

While we admit the imaginable of CMG arsenic an investment, our condemnation lies successful the content that immoderate AI stocks clasp greater committedness for delivering higher returns and doing truthful wrong a shorter clip frame. If you are looking for an AI banal that is arsenic promising arsenic CMG but trades astatine little than 5 times its earnings, cheque retired our study astir the cheapest AI stock.