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Investing.com - UBS lowered its price target on Chipotle Mexican Grill (NYSE:CMG) to $56.00 from $65.00 on Monday, while maintaining a Buy rating ahead of the company’s third-quarter earnings report due October 29. According to InvestingPro data, analyst targets for CMG range from $44.00 to $65.00, with 15 analysts recently revising their earnings expectations downward.
The price target reduction reflects UBS’s trimmed estimates and a reduced EBITDA multiple of approximately 25x, acknowledging expectations for more moderate same-store sales growth in 2026. Current InvestingPro metrics show CMG trading at an EV/EBITDA multiple of 25.4x, with the stock currently appearing overvalued based on InvestingPro’s Fair Value analysis.
UBS anticipates pressured sales and earnings for Chipotle’s third quarter due to industry and broader macroeconomic challenges, with consensus expectations for same-store sales around 0.8% while some investors expect flat to slightly negative growth of -50 basis points.
The firm attributes Chipotle’s top-line softness this year largely to industry headwinds, including struggles among consumers with incomes below $100,000 and emerging weakness from younger customers, with fourth-quarter trends likely remaining challenged.
Despite these near-term pressures, UBS believes Chipotle remains positioned for positive transaction growth in 2026 and maintains a strong unit development outlook of approximately 9%, suggesting current concerns are largely priced in with shares down about 30% year-to-date.
In other recent news, Chipotle Mexican Grill announced a $500 million authorization for its share repurchase program, bringing the total available for buybacks to approximately $750 million. This development follows the Board of Directors’ approval disclosed in an SEC filing. In another update, KeyBanc, Morgan Stanley, and Bernstein have all lowered their price targets for Chipotle, citing various concerns. KeyBanc reduced its target to $52, pointing to potential third-quarter 2025 sales growth challenges. Morgan Stanley adjusted its target to $59, anticipating a softer performance for the same period. Bernstein lowered its price target to $60, attributing the decision to macroeconomic pressures and a weakening labor market. Meanwhile, Stephens maintained an Equal Weight rating with a $60 price target, highlighting Chipotle’s upcoming introduction of Red Chimichurri sauce in the U.S. and Canada.
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