Chipotle (CMG) Has Had Multiple, Negative Catalysts

Chipotle (CMG) recently hit 52-week lows, and the shares are down 15% so far in 2025. The company has been hurt by weakening consumer confidence and a ” skimpy portions scandal,” while investors have been nervous about the impact of looming avocado tariffs on the firm, Investopedia’s Caleb Silver told Schwab Network recently.

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

A chef plating up a wide variety of dishes for a restaurant chain.

CMG’s Negative Catalysts

Amid weakening consumer sentiment, some Americans may have stopped eating at Chipotle, whose meals cost $17-$18, Silver stated. Additionally, the Trump administration could levy tariffs on avocadoes tomorrow, negatively impacting CMG’s bottom line, he said. Finally, the company was involved in an allegation of “skimpy portions” last summer, forcing it to provide its customers with more food and slightly reducing its margins, the commentator noted.

A Slightly Bullish Options Strategy

Investors who believe that CMG stock can advance slightly ahead of and after its Q1 earnings, slated to be unveiled on April 23, can buy April 25 call options with a $48 strike price, White stated. Investors who follow the strategy would break even at $51.90, he said.

While we acknowledge the potential of CMG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as CMG but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.