Apr. 13 at 9:38 PM
$CMG Opened a new long in CMG on 4/9... short the May
$30 puts. Breakeven on assignment lands in the low-
$29 range, which puts me right at the multi-year horizontal shelf the chart has defended repeatedly. 32 DTE, and yes, this position straddles the 4/29 earnings print -- that's part of why the premium is what it is, and I'm sized accordingly.
The setup:
– Weekly chart shows a clean trading channel between the ~
$29.58 floor and ~
$42.75 ceiling... every meaningful turn since 2022 has happened at one of those two rails
– Weekly RSI mid-40s, weekly stochastics under 19... oversold on the timeframe that matters for swing structure
– Down ~13% on the quarter, ~17% on the half, ~32% on the year, ~42% from the 52-week high
– PT
$42.75 isn't aggressive... it's a tag of the upper channel rail, the same level that capped price multiple times through 2023 and again on the 2025 retest
The thesis: this was the Wall Street darling no one could get enough of until comp growth rolled, traffic softened, and the market decided the brand was broken. It isn't. Sales still grew Y/Y, operating margin is sitting at 16.8%, ROE near 47%, and management has been pretty open about refocusing on the operational fundamentals that built the brand in the first place -- throughput, food quality, and the in-store experience -- instead of chasing the next loyalty gimmick. The multiple compression has done most of the work already: forward P/E down to ~25 from the 50+ range this name used to command. Not cheap in absolute terms, but cheap for what CMG has historically been.
Bear case I'm respecting: GLP-1 demand impact on QSR/fast-casual is a real structural overhang and nobody knows how it shakes out long-term. Comps could deteriorate further if the consumer keeps weakening, and a soft 4/29 print could pressure the shelf in a hurry -- that's exactly where I get assigned and start owning the name at a level I'm comfortable with. Analyst tape is genuinely mixed right now: Mizuho upgraded to Outperform with a
$40 PT in March, BNP initiated Neutral
$37 around the same time. Not a unanimous bull case, which I actually prefer when I'm taking the other side of the fear.
Plan: collect the premium, take assignment in the low-
$29S if the print disappoints, and start scaling into shares from a level the chart has defended for three-plus years. Channel bottom is where you want to be a buyer, not the middle.
Just my read. DYOR before putting any money to work. Giddy up!
