Schaeffer's Senior Quantitative Analyst Rocky White compiled a list of the worst 25 stocks to own in October, with data going back 10 years. Right at the top of the list is Chipotle Mexican Grill Inc (CMG), marking a monthly loss in eight of the past 10 Octobers. Averaging a return of -4.7%, a pullback of this magnitude from the equity’s current perch at $41.20 would put the shares at $39.26, back below recent pressure at the $40 level. Worst S&P 500 Stocks in October (10 Years)Schaeffer's Investment Resear ...

Core Insights - Chipotle Mexican Grill, Inc. (CMG) shares have decreased by 27.3% over the past three months, significantly underperforming the industry decline of 10.5% and the S&P 500's increase of 8.5% [1][6] - Other industry players such as Darden Restaurants, Restaurant Brands International, and CAVA Group have also experienced declines, with respective changes of -11.7%, -0.6%, and -30.9% [1] Factors Behind Chipotle's Recent Struggles - Chipotle is facing challenges from a volatile consumer environment, with lower-income customers becoming more value-conscious and seeking cheaper meal options from competitors [4][6] - The company is also dealing with cost pressures, including persistent wage inflation and increased marketing expenses to maintain visibility [5][6] - Competitive intensity is rising, as rivals attract value-seeking diners with aggressive pricing strategies, complicating Chipotle's ability to communicate its value proposition [7][8] Chipotle Estimate Revision - Earnings estimates for CMG in 2025 have been revised down from $1.21 to $1.20, with a projected year-over-year growth of 7.1% [9] - In contrast, earnings for Darden Restaurants, Restaurant Brands, and CAVA are expected to grow by 11%, 9.3%, and 33.3%, respectively [9] Key Drivers Poised to Support a Rebound - Ongoing investments in operations and technology, including new kitchen equipment, are expected to enhance efficiency and improve customer experience [12][14] - Menu innovation and marketing efforts, such as limited-time offerings and targeted campaigns, aim to drive customer engagement and traffic [14][15] - Digital and international expansion initiatives are set to provide significant growth opportunities, with a focus on enhancing the digital ecosystem and entering new markets [16][17] CMG Valuation - Chipotle's stock is trading at a forward 12-month price-to-earnings ratio of 29.86, which is higher than the industry average of 23.14 and the S&P 500's ratio of 21.65, indicating a premium valuation [18] Conclusion - Chipotle has strong long-term growth drivers, including operational upgrades, menu innovation, and expansion strategies, positioning the company for recovery once consumer sentiment stabilizes [21]

Core Insights - Chipotle Mexican Grill, Inc. is set to announce its third-quarter results on October 29, with analysts expecting an EPS of $0.29, reflecting a 7.4% increase from the previous year [2] - For the full fiscal year 2025, earnings are projected to be $1.20 per share, up 7.1% from $1.12 in 2024, with a further expected surge of 18.3% to $1.42 per share in fiscal 2026 [3] - Despite a strong earnings surprise history, Chipotle's stock has underperformed, dropping 29.3% over the past 52 weeks compared to the Consumer Discretionary Select Sector SPDR Fund's 20% increase and the S&P 500 Index's 17.4% gains [4] Financial Performance - In Q2, Chipotle's revenues increased by 3% year-over-year to $3.1 billion, but this was 1.2% below market expectations [5] - Comparable restaurant sales fell by 4% year-over-year, driven by a 4.9% decline in transactions, although this was partially offset by an increase in average check [6] - The restaurant-level operating margins contracted by 1.5% to 27.4%, and adjusted EPS decreased by 2.9% year-over-year to $0.33 [6] Analyst Sentiment - The consensus rating for Chipotle remains highly optimistic, with a "Strong Buy" rating from 22 out of 32 analysts, alongside three "Moderate Buys" and seven "Holds" [7] - The mean price target of $58.13 indicates a potential upside of 41.8% from current price levels [7]

Core Viewpoint - There is currently "little to no appetite" for restaurant stocks, according to BTIG, but Wingstop and Chipotle are identified as "rare opportunities" [1] Company Analysis - Wingstop is highlighted as a potential investment opportunity amidst the general lack of interest in restaurant stocks [1] - Chipotle is also recognized as a favorable investment option, suggesting it may outperform its peers in the current market environment [1] Industry Outlook - The overall sentiment in the restaurant industry is negative, with investors showing reluctance to engage with restaurant stocks at this time [1] - Despite the prevailing pessimism, specific companies like Wingstop and Chipotle stand out as exceptions, indicating potential for growth and investment [1]

Core Insights - Chipotle Mexican Grill (CMG) is focusing on menu innovation to maintain its competitive edge in the fast-casual dining sector [1][11] - Recent product launches, such as Chipotle Honey Chicken and Adobo Ranch dip, have shown positive early feedback and contributed to a rebound in comparable sales momentum [2][11] - Despite these innovations, comparable sales declined by 4% in the latest quarter due to broader consumer pressures and competition from lower-priced rivals [3][11] Menu Innovation and Promotions - The introduction of new menu items is paired with loyalty-driven promotions like the Summer of Extras, which has increased active rewards members and visit frequency [4] - Limited-time offerings and sides are currently effective in lifting comparable sales, but sustaining this momentum will require clearer communication of Chipotle's value proposition [5] Competitive Landscape - Competitors like Sweetgreen and Brinker International are also enhancing their offerings, focusing on culinary creativity and value promotions to attract budget-sensitive diners [6][7] - The competition emphasizes the need for Chipotle to balance culinary novelty with affordability to defend its market share [8] Financial Performance and Valuation - Chipotle's stock has decreased by 19.2% over the past six months, compared to a 5.9% decline in the industry [9] - The company trades at a forward price-to-sales ratio of 4.13X, which is above the industry average [12] - The Zacks Consensus Estimate predicts a year-over-year earnings increase of 7.1% for 2025 and 17.7% for 2026 [16]

Market Overview - Mid cap growth equities experienced modest gains in Q3, with the Russell Midcap Growth Index returning 2.8%, lagging behind the Russell Midcap Value Index at 6.2% and the Russell Midcap Index at 5.3% [3] - The U.S. Federal Reserve's rate cut in September contributed to easing monetary policy, benefiting rate-sensitive sectors and renewing interest in cyclical and innovation-led areas [3] Investor Sentiment - Investor sentiment improved due to the passage of the One Big Beautiful Bill and progress on trade agreements, reducing policy uncertainty and enabling companies to execute delayed strategic decisions [4] - Earnings estimates stabilized, particularly in technology and AI-related sectors, despite ongoing challenges in non-residential construction and discretionary segments [4] Portfolio Performance - The ClearBridge Mid Cap Growth Strategy outperformed its benchmark in Q3, driven by stock selection in IT, consumer staples, and healthcare sectors, while consumer discretionary and financials sectors slightly detracted from performance [5] Sector Contributions - In the IT sector, AppLovin (APP) and Monolithic Power Systems (MPWR) were standout performers, with AppLovin benefiting from strong earnings and optimism around its e-commerce business [6] - Consumer staples saw positive contributions from Performance Food Group (PFGC) and Casey's General Stores (CASY), both benefiting from strong operational performance [7] - The consumer discretionary sector faced challenges, particularly with Chipotle Mexican Grill (CMG) and Wingstop (WING) experiencing declines due to competitive pressures and softer spending trends [8] - Financials sector was a modest drag on performance, with Tradeweb Markets (TW) and Corpay facing challenges from macro volatility and company-specific issues [9] Portfolio Positioning - New positions were initiated in Roblox, benefiting from improved growth dynamics and advertising opportunities, and APi Group, which is well-positioned in safety and industrial services [10][11] - Exited position in Deckers Outdoor (DECK) due to increasing competitive pressures in the sneaker market [12] Outlook - Leadership within mid growth stocks remains selective, with a few companies rewarded for differentiated technology and strong pipelines, while others struggle with demand and competition [13] - Focus remains on identifying businesses with secular growth drivers across technology, healthcare, and industrials sectors [14] - Near-term market uncertainty is expected to persist, but the strategy is positioned to benefit from companies sustaining durable growth in earnings and cash flow [15] Portfolio Highlights - The ClearBridge Mid Cap Growth Strategy had positive contributions across seven of the 11 sectors, with IT and healthcare being the leading contributors [16] - Stock selection in IT, consumer staples, healthcare, and energy sectors contributed positively, while consumer discretionary and financials sectors weighed on performance [17] - Individual stock contributions included AppLovin, United Rentals (URI), and Performance Food, while detractors included Chipotle Mexican Grill and Tradeweb Markets [18]

Core Insights - The article discusses the evolution of Mapache Investing's approach to wealth creation, transitioning from speculative trading in cryptocurrency to a disciplined fundamental analysis in the stock market [1] - The focus is on identifying operationally sound companies that are often overlooked by the market, particularly in sectors experiencing structural changes [1] Group 1: Investment Philosophy - Mapache Investing combines accounting education with market experience to enhance stock analysis [1] - The emphasis is on understanding financial statements to identify potential red flags that may be missed by pure traders [1] - The goal is to achieve financial independence through disciplined investing while building an online presence [1] Group 2: Market Insights - The experience in cryptocurrency trading has provided insights into distinguishing genuine innovation from market hype [1] - There is a particular interest in companies with strong fundamentals that are trading at reasonable valuations [1] - The approach prioritizes consistent returns over speculative investments, highlighting the importance of understanding both numbers and narratives in investing [1]

Core Points - Chipotle Mexican Grill has launched the "Chipotle Challenger Bundle" in partnership with Riot Games' new fighting game 2XKO, allowing players to unlock exclusive in-game items by placing digital orders [1][8] - The bundle includes Chipotle-themed digital items for players' avatars, such as a hoodie, sweatpants, sneakers, hat, sling backpack, and a sticker [2][4] - This initiative is part of Chipotle's ongoing support for the Fighting Game Community (FGC) and aims to enhance player engagement through unique brand integration [6][8] Company and Industry Summary - The "Chipotle Challenger Bundle" is available for players who order through the Chipotle app or website using the promo code "LETSDUO," starting today and while supplies last [3][8] - Chipotle's partnership with Riot Games was initially announced before Evo Las Vegas 2025, featuring tournaments and community engagement activities [7] - The promotion is limited to the first 40,000 customers who order a regular-priced entrée item, with codes redeemable until February 7, 2026 [9]

Group 1: Market Overview - Equities experienced significant growth in Q3 2025, with the S&P 500 Index increasing by 8.1% and the Nasdaq Composite rising by 11.2% to reach record highs [1] - Investor optimism was fueled by favorable tariff results, the One Big Beautiful Bill in July, anticipated interest rate cuts, and strong corporate earnings, particularly in the technology sector and the Magnificent Seven [1] - The Russell 1000 Growth Index rose by 10.5% during the quarter [1] Group 2: ClearBridge Large Cap Growth Strategy Performance - The ClearBridge Large Cap Growth Strategy delivered solid absolute performance in Q3 2025 but underperformed the benchmark due to underexposure to perceived AI winners and holding several stocks viewed as AI losers [1] - The fund's top five holdings can provide insights into its best picks for 2025 [1] Group 3: Chipotle Mexican Grill, Inc. (NYSE:CMG) Analysis - Chipotle Mexican Grill, Inc. (NYSE:CMG) had a one-month return of -1.35% and a 52-week loss of 26.88%, closing at $41.76 per share with a market capitalization of $55.995 billion on October 3, 2025 [2] - The company was repurchased by ClearBridge, which views its recent weaker sales as more macroeconomic than execution-related, indicating potential for recovery in an improving economic environment [3] - Despite acknowledging Chipotle's potential, the company believes certain AI stocks present greater upside potential and less downside risk [3]

Core Points - Chipotle Mexican Grill has launched a new promotion called "Chip-or-Treat" for its Rewards members, offering free treats throughout October to celebrate Halloween [1][2][4] - The promotion allows Rewards members to receive a new weekly treat for purchasing an entrée each week, with options including free guacamole, double protein, or bonus Rewards points [2][7][8] - Chipotle is expanding its traditional Boorito event into a month-long celebration, marking the 25th anniversary of the Boorito tradition [4][6] Promotion Details - The "Chip-or-Treat" promotion runs from October 6 to October 30, allowing members to earn up to four treats and exclusive Rewards badges by making weekly purchases [1][8] - Members will receive a tailored treat via email within a few hours after their purchase, valid for five days [8] - New Chipotle Rewards members will receive a free guacamole offer upon signing up and making their first purchase [4][5] Target Audience - The promotion targets adults, with 77% expressing nostalgia for trick-or-treating, making it a strategic move to engage this demographic [2][7] - Chipotle has also introduced a separate loyalty program, Chipotle U Rewards, aimed at college students, offering bonus points and rewards tailored to their educational milestones [5] Company Overview - Chipotle operates over 3,800 restaurants across multiple countries and is committed to serving responsibly sourced, real food without artificial ingredients [10] - The company emphasizes its dedication to sustainability and innovation in the food industry, aiming to enhance accessibility to its offerings [10]