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Investing.com - RBC Capital has lowered its price target on Chipotle Mexican Grill (NYSE:CMG) to $58.00 from $65.00 while maintaining an Outperform rating on the stock following disappointing second-quarter results. According to InvestingPro data, the stock is currently trading near its 52-week low of $44.46, despite maintaining a strong financial health score rated as "GOOD" by the platform.
The Mexican food chain reported same-store sales (SSS) of -4% for the quarter, missing expectations by 112 basis points. RBC attributed this underperformance to macroeconomic volatility and correlation to consumer sentiment, which reached its lowest point in May.
Despite the weak quarter, RBC noted some positive developments, including a return to April’s trend of approximately 8% two-year comparable sales stack in both June and July. This improvement coincided with better consumer sentiment, the introduction of adobo ranch, and new marketing initiatives.
The volatility throughout the quarter prompted Chipotle’s management to lower its fiscal year 2025 same-store sales guidance to approximately flat from previous expectations of low-single-digit growth, leading RBC to reduce its estimates and price target.
RBC continues to view Chipotle as a mid-single-digit comparable sales grower, with 2026’s third limited-time offering and new store equipment expected to drive a reacceleration in performance.
In other recent news, Chipotle Mexican Grill reported its second-quarter 2025 earnings, showing a decline in same-store sales of 4.0%, which was below analyst expectations. The company also revised its full-year same-store sales guidance to flat, down from the previously projected low-single-digit growth. Despite these challenges, UBS reiterated its Buy rating on Chipotle, highlighting some improvement in sales and transaction growth by the end of the quarter. Bank of America Securities also maintained a Buy rating, based on Chipotle’s long-term growth prospects with an expanded footprint.
Piper Sandler raised its price target for Chipotle to $53 from $52, while maintaining a Neutral rating, following the earnings report. Wells Fargo (NYSE:WFC), however, lowered its price target to $60 from $65, citing slower-than-expected comparable sales performance. The firm noted that the restaurant chain showed improvement throughout the quarter, with sales turning positive in June. Bernstein maintained an Outperform rating on Chipotle despite the earnings miss. These developments reflect varied analyst perspectives on Chipotle’s financial performance and future potential.
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