Chipotle Initiated At Nomura At Neutral On Uncertain Sales Recovery

Chipotle Mexican Grill Inc. was initiated at Nomura with a neutral rating based on the company's unclear path to sales recovery. The bank set a price target of $420. Shares are trading at about $513 on Friday. "Management has laid out plans for investments to improve in these areas in 2016, but it is difficult to pinpoint when these efforts will translate into historical levels of customer traffic," analysts wrote in a Friday note. Nomura is also concerned about potential food safety issues in the future, the battle between results and estimates, and rising labor costs. However, analysts believe Chipotle has a number of favorable qualities, including differentiated "Food With Integrity" brand positioning and opportunities for market share gains. Chipotle shares are down 23.7% for the past 12 months, but up 7% for the year-to-date. The S&P 500 is down 6.8% for the year so far.