Credit Suisse Downgrades Chipotle Mexican Grill (CMG) to Neutral; 'New Normal'

October 26, 2016 7:25 AM EDT
Get Alerts CMG Hot Sheet
Price: $367.88 +0.41%

Rating Summary:
    16 Buy, 17 Hold, 9 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 21 | Down: 31 | New: 25
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Credit Suisse downgraded Chipotle Mexican Grill (NYSE: CMG) from Outperform to Neutral with a price target of $375.00 (from $500.00) citing a 'new normal' following disappointing results.

Analyst Jason West commented, "CMG posted another disappointing result as the sales recovery continues to take longer than expected. 3Q same store sales (SSS) were -22% vs. CS/cons. -18% (per Consensus Metrix). Trends barely budged from 2Q16 (-24%) despite ~200bps easier compare and rollout of an aggressive (temporary) loyalty program during 3Q. GAAP EPS was 27c (incl. ~52c one-time items) vs. CS/cons. $1.24/$1.63. Restaurant margins of 14.1% missed CSe by 310bps on lower SSS, loyalty program costs, higher marketing/promo spend, and higher avocado costs."

The firm's 2016/2017 EPS moves to $1.14/$8.82 from $2.51/$10.49. 4Q16E SSS falls to -3.5% from 0%. 2017 forecast now embeds +9% SSS (from +11%).

For an analyst ratings summary and ratings history on Chipotle Mexican Grill click here. For more ratings news on Chipotle Mexican Grill click here.

Shares of Chipotle Mexican Grill closed at $405.67 yesterday.



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