Bernstein lowers Chipotle stock price target to $40 on weak outlook

Investing.com - Bernstein SocGen Group lowered its price target on Chipotle Mexican Grill (NYSE:CMG) to $40.00 from $60.00 on Thursday, while maintaining an Outperform rating following the company’s third-quarter results. The new target still represents potential upside from the current price of $39.76, with InvestingPro data showing the stock trading 40% below its 52-week high of $66.74.

The fast-casual restaurant chain reported same-store sales growth of 0.3% in the third quarter of 2025, missing consensus expectations of 1.0% and prompting its third consecutive full-year guidance reduction. This disappointing performance comes despite overall revenue growth of 8.57% in the last twelve months.

Chipotle now forecasts a low-single-digit decline in full-year comparable sales, downgraded from its previous expectation of flat growth, as menu and marketing initiatives have failed to offset traffic declines. InvestingPro analysis reveals that 15 analysts have revised their earnings downwards for the upcoming period, with EPS forecast for FY2025 now at $1.20.

Bernstein expressed concern about "persistent macro pressures" affecting the company and noted that management credibility has been damaged by the repeated guidance cuts, potentially causing the stock to trade "meaningfully below its 48x 5-year average." The stock currently trades at a P/E ratio of 35.5x and a PEG ratio of 3.38, indicating it’s trading at a high multiple relative to near-term earnings growth.

The firm reduced its fiscal year 2026 earnings per share estimate to $1.20 from $1.47, with the new price target representing moderate upside from Chipotle’s after-hours price of $33. Despite these challenges, InvestingPro’s overall financial health score for Chipotle remains "GOOD," with particularly strong profit metrics and the company maintaining profitability over the last twelve months.

In other recent news, Chipotle Mexican Grill reported its third-quarter earnings for 2025, with earnings per share meeting expectations at $0.29, although revenue fell short of forecasts at $3 billion. Several analyst firms have adjusted their price targets for Chipotle following these results. Raymond James lowered its price target to $40, citing weaker sales trends and rising commodity inflation pressures. Stifel also reduced its price target to $50, pointing to macroeconomic pressures affecting consumer spending as a contributing factor. Mizuho cut its target to $34, following what it termed an "underwhelming" third-quarter performance and a cautious outlook for fourth-quarter sales growth. Goldman Sachs decreased its price target to $45, attributing the change to inflationary challenges and macroeconomic pressures on Chipotle’s core consumer segments. These adjustments reflect concerns over Chipotle’s recent sales trends and broader economic factors impacting the restaurant industry.

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