Chipotle Mexican Grill Inc. (NYSE: CMG) shares slumped early on Monday after the stock was downgraded by a key analyst.
Wedbush downgraded Chipotle to Underperform from Neutral with a $445 price target, implying downside of about 14.5% from the current price level. The firm sees increased risk to near-term same-store sales (SSS) growth and margin expectations, with continued risk to margin expectations through 2020.
Overall, the firm’s third-quarter-to-date checks suggest SSS growth trending below the 5.7% consensus. Monthly cadence in the third quarter of 2017 consisted of a tougher July (+4.5%) and September (+6.0%), which laps the launch of Queso. As a result, considering an easier August comparison and a July comp roughly in-line with the second quarter’s 3.3%, there should be a higher SSS growth rate in August than its checks imply. Wedbush attributes a slowdown to the Ohio outbreak. The firm believes a higher year-over-year promotional cadence through the end of the third quarter is likely. However, Wedbush is lowering its third-quarter SSS growth estimate to 4.5% from 5.5%.
As a result, Wedbush lowered its earnings estimates for the next few years. The firm lowered its 2018 EPS estimate to $8.64 from $8.85, 2019 estimate to $11.43 from $11.47 and 2020 EPS to $14.00 to $14.19.
Shares of Chipotle closed Friday at $520.71, with a consensus analyst price target of $462.43 and a 52-week range of $247.52 to $530.68. Following the announcement, the stock was down about 1.5% at $513.00 in early trading indications Monday.
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
