It is one thing for an analyst to downgrade a stock formally, but then there are stealth downgrades that tend to fly under the radar. Chipotle Mexican Grill Inc. (NYSE: CMG) has seen many analyst downgrades of late after a renewed fear of illnesses and then a brief rodent issue. On Monday, Chipotle investors saw a stealth downgrade that should have been given much more attention.

Credit Suisse maintained its Neutral rating on Chipotle. The news sounds harmless enough on the surface. The exception here is that Credit Suisse rates companies on a peer-to-peer level rather than on an absolute basis against the market in general. Where this call should have garnered much more attention is that Credit Suisse slashed its price target to $325 from $425 in the call. If you consider a prior close of $345.34, that means that the firm’s prior upside price target of 23% higher is now telegraphing that Chipotle investors should expect a dead-money stock that could lose another 6% before its fair value is met.

The firm updated its proprietary online sentiment tracker to measure changes in sentiment toward the Chipotle brand in the wake of last week’s norovirus and “mice video” headlines. While the sentiment change is not really a surprise, the Credit Suisse proprietary data now suggests that Chipotle’s same-store sales have likely fallen to at least negative 10% in recent days — if not worse.

According to Credit Suisse’s report, this sentiment data has had a +76% correlation with Chipotle’s same-store sales trends since the 2015 food safety crisis.

In this stealth downgrade, Credit Suisse cut its third-quarter and fourth-quarter same-store sales estimates to −2% from +7% (Q3) and −3% from +4% (Q4). The firm’s annual earnings estimates also have been lowered handily to $5.89 per share from $6.98 in 2017 and to $8.02 from $10.77 in 2018.

One more issue for Chipotle is that Monday’s stealth downgrade noted that the recent negative headlines may actually delay the company’s needed price increases on its menu items. Credit Suisse now assumes no additional menu pricing in 2018, versus a prior expectation for 3% price hikes in 2018.

The firm also sees a risk to Chipotle’s total store count growth. Credit Suisse is now modeling new unit openings moderating to about 150 new stores in 2018 and about 100 in 2019. The current model is for roughly 200 new stores per year.

What should handily stand out to investors is that Chipotle’s cratering stock price has not made the stock cheap against the market. If earnings and sales would feel no impact, that is one thing, but Credit Suisse’s new $325 price target still implies roughly 18 times the firm’s new 2018E EBITDA of $540 million and also embeds a return to low double-digit EBIT margins over time and ongoing unit growth in the mid-single-digit range.

If Chipotle was trading at 18 times expected earnings it would be one thing. Even at the $325 target price from Credit Suisse, new investors would be looking at a stock that is trading at 40 times expected 2017 consensus earnings and 27 times expected 2018 consensus earnings. If there is now lower growth, do either of those sound “cheap” for a stock that has been bruised?

Credit Suisse also makes what it calls blue sky and grey sky scenarios, which imply if things get much better than expected or if they go worse. Chipotle’s blue sky case went down to $450 from $590 in this call, and the grey sky scenario went down to $200 from $275. Jason West of Credit Suisse said in his note:

Our blue sky target of $450 assumes a 35x P/E multiple on upside EPS of ~$13/share in 2018. This could be achieved with a recovery in underlying traffic, low single-digit pricing and tax reform (~$3/share benefit to ongoing CMG EPS) …. Our grey sky target of $200 assumes run-rate free cash flow of ~$300mm under a low-growth/stabilization scenario. Using a mid single-digit free cash flow yield implies a stock in the $200 range.

Chipotle had a prior 52-week trading range of $234.34 to $496.14, but the stock hit a new 52-week low of $336.65 on Monday. On last look, its stock was trading down 0.8% at $342.66.

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