UBS lowers Chipotle stock price target to $45 from $56, maintains Buy rating

Investing.com - UBS lowered its price target on Chipotle Mexican Grill (NYSE:CMG) to $45.00 from $56.00 on Friday, while maintaining a Buy rating on the stock. This adjustment comes as CMG shares have fallen 46% year-to-date and are currently trading near their 52-week low of $31.01.

The price target reduction follows Chipotle’s third-quarter results, which showed challenged same-store sales and margins amid ongoing macroeconomic pressures. UBS noted that these weaknesses are continuing into the fourth quarter, effectively resetting 2026 projections lower. InvestingPro data shows 15 analysts have recently revised their earnings downward, confirming this cautious outlook.

UBS attributed the sales pressures to cyclical rather than structural factors, primarily related to macroeconomic headwinds and consumer softness. These challenges have resulted in a worse-than-expected outlook for the fourth quarter, with comparable sales projected to decline in the low-to-mid single digits. Despite these headwinds, Chipotle maintains a strong financial foundation with liquid assets exceeding short-term obligations and a moderate debt level.

The firm reduced its 2026 and 2027 earnings per share estimates due to a weaker sales outlook and margin pressures. These pressures stem from limited pricing power, potentially challenged traffic, and other possible investments the company may need to make. The stock currently trades at a P/E ratio of 27.85, which InvestingPro identifies as high relative to near-term earnings growth expectations.

Despite the lowered outlook, UBS believes the premarket pullback in Chipotle shares already reflects much of the anticipated pressure, while potential upside exists from an eventual improvement in macroeconomic conditions and brand initiatives that could support a positive sales inflection. According to InvestingPro’s Fair Value assessment, Chipotle appears undervalued at current levels, with the stock’s RSI suggesting it’s in oversold territory. The company remains profitable with 8.57% revenue growth over the last twelve months. For deeper insights and 15+ additional ProTips, check out Chipotle’s comprehensive Pro Research Report.

In other recent news, Chipotle Mexican Grill reported its third-quarter earnings, which showed earnings per share in line with analyst forecasts. However, the company’s same-store sales growth of 0.3% fell short of the expected 1.0%, leading to a reduction in its full-year guidance for the third consecutive time. Analysts have responded to these results by adjusting their price targets for the company. Truist Securities lowered its price target to $45, citing macroeconomic pressures affecting Chipotle’s customer traffic. BMO Capital reduced its target to $55 due to margin pressure, despite favorable general and administrative expenses and taxes. RBC Capital set a new target of $40, attributing the change to ongoing macroeconomic headwinds and a shift in consumer dining preferences. KeyBanc also adjusted its price target to $45, noting sales challenges despite in-line earnings per share. Lastly, Bernstein SocGen Group reduced its target to $40, referencing a weak outlook and the missed sales expectations.

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