In a research report issued Friday, Canaccord analyst Lynne Collier reiterated a Hold rating on shares of Chipotle Mexican Grill, Inc. (NYSE:CMG), while lowering the price target to $400 (from $440), after the fast food chain confirmed that the norovirus was the culprit of more than 130 cases of illness in a Sterling, VA Chipotle location. Separately, it was highlighted that a restaurant location in Dallas, TX had a rodent problem which was videotaped by a consumer.
Collier commented, “Following additional news events highlighting CMG in a negative light, we are decreasing our estimates as we believe the sales recovery will be at a slower pace than we originally thought. Minor issues, such as the recent norovirus event, will continue to be magnified by the press and social media, providing on-going risk for investors. In terms of valuation, shares presently trade at 15.5x NTM consenus EBITDA estimates.” (To watch Collier’s track record, click here)
Out of the 26 analysts polled in the past 3 months, 7 rate Chipotle stock a Buy, 14 rate the stock a Hold and 5 recommend to Sell. With a return potential of 27%, the stock’s consensus target price stands at $453.14.