RBC Capital analyst, David Palmer, cut estimates on Chipotle Mexican Grill (NYSE: CMG) but maintained his PT due to the short term nature of the recovery. No change to Outperform rating.

The 2016 EPS estimate drops from $8.06 to $6.46 (-57% YOY) to reflect weaker than expected quarter to date SSS trends (-26% vs. cons. -23%) and worse than expected near-term profitability. The 2017 EPS reduction is less than 2016 because: 1) the same sales recovery should begin in 4Q; and 2) much of the margin degradation is one-time in nature (e.g., couponing to drive trial and up-front investments to bolster food safety).

Accordingly, there is no change to the $500 price target, which is based on 35x 2017 EPS of $14.28 (vs. $15.08 prior).

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 $503.00 yesterday.

Analyst Comments Analyst EPS Change

Chipotle Mexican Grill (CMG) Downgraded to Underperform at JefferiesMarch 17, 2016 7:23 AM Chipotle (CMG) Plans to Mail ~21M Cards for Free Burritos; Sees Recent Norovirus Incident as 'Non Event'March 16, 2016 10:48 AM Chipotle's (CMG) Traffic Improvement in Feb. More Significant than Comps Suggest - BTIGMarch 16, 2016 9:12 AM Chipotle Mexican Grill's (CMG) Price Target Raised to $550 at SunTrust March 16, 2016 9:08 AM Maxim Group Downgrades Chipotle Mexican Grill (CMG) to SellMarch 16, 2016 7:49 AM Piper Jaffray Backs Bull View On Chipotle Mexican (CMG) After PreannouncementMarch 16, 2016 7:48 AM Chipotle sales worse than expected in Feb, first-quarter loss seenMarch 15, 2016 4:37 PM Chipotle Mexican Grill (CMG) Updates on Q1 Performance; Feb Comps Down 26.1%, Sees Loss of $1/Share or Worse vs. Expected ProfitMarch 15, 2016 4:27 PM