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Tickers in this Article: CMG
Chipotle Mexican Grill (NYSE:CMG) is expected to report increased earnings when it releases its third quarter results on Thursday, October 18, 2012. The consensus estimate is anticipating a profit of $2.31 a share, an increase from last year's $1.90 per share.

Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: Earnings: Quality Means Everything

What to Expect: Analysts are expecting Chipot to report earnings of $2.31 per share, up 21.6% from a year ago, when the company reported earnings of $1.90 per share.

The consensus estimate has increased in the last 30 days, from $2.30, but it is still less than the estimate of $2.37 from three months ago. Analysts are projecting earnings of $9.01 per share for the fiscal year.

Chipot is expected to beat last year's reported revenue of $591.9 million and come in at $703.1 million for the quarter. Revenue of $2.73 billion is expected for the fiscal year.

Company Performance: Revenue increases have been in the double digits for the past four quarters. The average revenue increase has been 23.6%. The first quarter marked the biggest jump of 25.8%.

CMG has a P/E ratio of 35.3, high compared to the industry average of 20.0. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Investment Valuation Ratios: Price/Earnings Ratio

Since July 17, 2012, the stock price has dipped 27.2% to $290.47 from $398.91. The biggest recent change for Chipot's stock price came on September 7, 2012, when it rose $24.02 per share to $326.35.

The Competition: Chipotle Mexican Grill develops and operates fast-casual, fresh Mexican food restaurants in 35 states throughout the United States, the District of Columbia, and Ontario, Canada. Fifteen of 22 analysts rate Chipot a hold. This marks a small improvement, as the number of buy ratings has risen slightly over the past three months.

The company's closest competitor in the restaurants industry is McDonald's (MCD). Analysts are less optimistic about Chipot than about McDonald's. Fourteen out of 24 analysts rate the latter a buy compared to five of 22 for the former.

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