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Investing.com - Mizuho has reduced its price target on Chipotle Mexican Grill (NYSE:CMG) to $34.00 from $40.00 while maintaining a Neutral rating on the stock. This adjustment comes as CMG trades at $39.76, down 34.06% year-to-date and significantly below its 52-week high of $66.74. InvestingPro data shows the stock is currently trading slightly below its Fair Value, despite its high P/E ratio of 35.5.
The price target cut follows what Mizuho described as "an underwhelming Q3" performance and Chipotle’s fourth-quarter same-store sales growth guidance of low-to-mid-single-digit percentage, which falls below the consensus expectation of 1.1%. According to InvestingPro, 15 analysts have revised their earnings downwards for the upcoming period, reflecting growing concerns about the company’s near-term performance.
Mizuho expects Chipotle management to "aggressively invest in price to stabilize and reverse trends," potentially implementing zero or less than 1% pricing increases through the first half of 2026.
The firm has lowered its 2026 same-store sales growth estimate to 1.8% from 3.1%, compared to the consensus of 3.6%, and now projects a 2.0% decline in the first quarter of 2026.
Mizuho also reduced its 2026 unit-level margin estimate to 24.3% from 25.8% and cut its earnings per share estimate to $1.18 from $1.30, citing limited visibility on pricing and margins amid expected mid-single-digit commodity inflation and low-single-digit labor cost increases.
In other recent news, Chipotle Mexican Grill reported its third-quarter earnings for 2025, showing a mixed performance. The company’s earnings per share (EPS) met expectations at $0.29, while revenue fell short of forecasts, coming in at $3 billion. In response to these results, Goldman Sachs adjusted its price target for Chipotle, lowering it to $45 from $52, though the firm maintained a Buy rating. The decision was influenced by anticipated inflationary pressures and macroeconomic challenges expected to affect Chipotle’s customer base, particularly younger and lower-income segments. These developments reflect the broader industry concerns about economic conditions impacting consumer spending.
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