UBS reiterates Buy rating on Chipotle stock amid sales pressure

Investing.com - UBS has reiterated its Buy rating and $65.00 price target on Chipotle Mexican Grill (NYSE:CMG) despite the restaurant chain reporting pressured same-store sales in its second quarter results. According to InvestingPro data, CMG currently trades at a P/E ratio of 39.9x and shows strong financial health with an overall score of "GOOD."

The fast-casual Mexican food chain experienced sales challenges due to ongoing macroeconomic pressures and difficult year-over-year comparisons, according to UBS. The firm noted some improvement through the quarter with positive same-store sales and transaction growth by the end of the period.

Chipotle’s second-quarter margins performed slightly better than expected, with UBS indicating that profitability will likely be effectively managed in coming quarters. Store development plans remain on track with strong returns and new store productivity.

UBS highlighted that Chipotle has lowered its 2025 same-store sales guidance to approximately flat from previous low-single-digit growth, reflecting year-to-date pressure and recent choppiness. July showed an underlying two-year same-store sales stack of 7-8% with positive year-over-year transaction growth.

The setup into 2026 appears encouraging according to UBS, with easier comparisons and multiple initiatives including three protein limited-time offerings and likely increased marketing to support trends improving closer to mid-single-digit growth. UBS believes Chipotle remains positioned to deliver higher quality growth in the sector.

In other recent news, Chipotle Mexican Grill’s second-quarter 2025 earnings report revealed a decline in same-store sales by 4.0%, which fell short of analyst expectations. The company has adjusted its full-year guidance for same-store sales to flat, down from the previously anticipated low-single-digit growth. In response to these results, several financial firms have revised their outlook on Chipotle. Piper Sandler raised its price target to $53, maintaining a Neutral rating. Meanwhile, Wells Fargo (NYSE:WFC) lowered its price target to $60, citing weaker-than-expected sales, but kept an Overweight rating. Similarly, Citi adjusted its price target to $62, maintaining a Buy rating and noting concerns about near-term challenges. Bank of America Securities reaffirmed its Buy rating with a price target of $64, citing long-term growth potential. These developments highlight varying analyst perspectives on Chipotle’s future performance amid current sales challenges.

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