Chipotle Mexican Grill Inc (NYSE:CMG) stock is up 2.1% at $28.77 in premarket trading, after J.P. Morgan Securities upgraded the restaurant stock to "overweight" from "neutral," citing an attractive valuation opportunity. The firm also trimmed its price target to $35 from $38.
The bull note arrives after a brutal stretch on the charts for Chipotle stock. The shares plunged to a more than three-year low of $28.04 yesterday alongside a sixth-straight drop. CMG is down 46% over the last 12 months and roughly 13% in just the last week. Strengthening its case for a rebound, CMG sits in "oversold" territory, per its 14-day relative strength index (RSI) of 24.3.
The majority of analysts are already bullish on CMG. Heading into today, 25 of the 35 in coverage carry a "buy" or better rating, with 10 "holds" and no sells on the books.
Options traders are pricing in relatively low volatility expectations, per Chipotle's Schaeffer's Volatility Index (SVI) of 38%, which sits in the 28th percentile of its annual range. Meanwhile, the stock's Schaeffer's Volatility Scorecard (SVS) of 93 out of 100 indicates it has consistently exceeded those expectations during the past year.
