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Investing.com - BMO Capital has lowered its price target on Chipotle Mexican Grill (NYSE:CMG) to $55.00 from $65.00 while maintaining an Outperform rating on the stock. Chipotle shares are currently trading at $32.96, down significantly from their 52-week high of $66.74, with a year-to-date decline of 34%. According to InvestingPro data, the stock appears undervalued based on its Fair Value assessment.
The price target reduction follows Chipotle’s in-line third-quarter 2025 earnings per share of $0.29, which reflected favorable general and administrative expenses and taxes offsetting margin pressure and slightly softer comparable sales.
Chipotle has lowered its 2025 comparable sales outlook, implying fourth-quarter sales will be down low-single to mid-single digits compared to the Street’s expectation of a 1.1% increase, and now expects mid-single digit percentage commodity inflation in 2025 and 2026.
The restaurant chain also suggested pricing will remain below 2%, according to BMO Capital’s analysis of the company’s statements.
Despite the price target reduction, BMO Capital attributes the performance lag largely to macroeconomic factors and believes the array of negative factors is now priced into the stock after Chipotle used its earnings call to reset expectations.
In other recent news, Chipotle Mexican Grill’s third-quarter performance has prompted several investment firms to adjust their price targets. RBC Capital lowered its price target to $40, citing ongoing macroeconomic challenges affecting consumer dining habits. Similarly, Bernstein SocGen Group also reduced its target to $40, maintaining an Outperform rating despite Chipotle’s same-store sales growth of just 0.3%, which fell short of expectations. KeyBanc adjusted its price target to $45, noting that although earnings per share were in line, store-level margins and sales growth faced challenges. Raymond James followed suit, lowering its target to $40, pointing to weak sales trends and rising commodity inflation as factors. Stifel decreased its price target to $50, attributing this to weaker-than-expected sales in the third quarter, influenced by broader economic pressures. These recent developments reflect analysts’ concerns over Chipotle’s performance amid a challenging economic environment.
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