Reported 4 months ago
Chipotle Mexican Grill (NYSE:CMG) stock, currently trading at 67x earnings, is considered a market anomaly due to its overvaluation compared to government bond yields. Despite investors citing growth, drive-throughs, recession-resistant demand, and a strong balance sheet, the stock's valuation is seen as unsustainable. Analysts anticipate a potential 50% decline in Chipotle's stock price if it were to be re-rated to a more reasonable P/E ratio of 35x. As Chipotle's growth rate is expected to slow down in the future, its current high valuation is deemed unjustified.
Source: YAHOO