Chipotle's Stock Price Target Cut At Wedbush Amid Same-store Sales Growth Concerns

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The 12-month price target for Chipotle Mexican Grill Inc.'s stock was slashed to $620 on Friday, which is just 1.3% above current levels, from $665 at Wedbush Securities, which cited concerns that same-store sales may disappoint. Analyst Nick Setyan reiterated his neutral rating on the stock, saying same-store sales (SSS) may need to grow faster than at a mid-single-digit percentage rate in June, to meet the fast-casual restaurant chain's second-quarter guidance for growth in the low-to-mid-single-digit range. He also said that while catering is often cited by Chipotle as a driver, "it has remained fairly consistent as a percent of sales," so he doesn't see it outsized contributor. "[We] continue to believe current valuation appropriately reflects lower visibility into Chipotle's near- and medium-term SSS growth trajectory and margin opportunity, buttressed by industry-leading unit economics," Setyan wrote in a note to clients. The stock, which was still inactive in premarket trade, has slumped 11% year to date, while the S&P 500 has gained 1.8%.

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