Chipotle Mexican Grill Inc. (NYSE: CMG) appears to be making a recovery, months after the company faced an E.coli outbreak. It might be safe to say the bleeding has stopped, according to one analyst, but there are still some near-term obstacles that must be overcome.

Credit Suisse sees a risk of near-term disappointment for Chipotle but overall the firm remains bullish on the long-term recovery of this burrito business. As a result, Credit Suisse maintained its Outperform rating while lowering estimates and raising its price target to $550 from $475.

The firm expects Chipotle to provide an update on first quarter sales in the next couple of weeks. Credit Suisse is also lowering its estimates ahead of this update, as aggressive promotional efforts have likely helped traffic in recent weeks, but at the expense of “real” sales. The consensus calls for -25% in same-store sales (SSS) for the full first quarter, implying roughly -20% for February and March combined. Credit Suisse believes Chipotle is unlikely to achieve this level of sequential improvement from January (-36%), considering the impact of couponing. The firm lowered its first-quarter SSS forecast to -30% from -25%, which now embeds roughly -30% SSS for February and about -25% for March.

With the consensus sitting at -25% SSS for the first quarter, and given the recent strength in the stock (up about 30% from January’s lows), Credit Suisse believes shares could give back some of the recent gains if its updated forecasts prove correct. However, a headline miss on SSS could be partly mitigated by improvement in underlying traffic trends.

Credit Suisse detailed in its report:

We’re also encouraged by the improved traffic we’re seeing at CMG, which suggests customers are willing to give the brand another try and gives us higher confidence in the recovery scenario baked into our model.

The firm lowered its 2016, 2017 and 2018 EPS estimates to $7.09, $14.43 and $18.22 from $7.53, $14.50 and $18.31, respectively.

Shares of Chipotle were trading at $530.18 Monday afternoon, with a consensus analyst price target of $491.92 and in a 52-week trading range of $399.14 to $758.61.

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