Out of flavor: Wall Street slashes targets on Chipotle
(Reuters) - From the carnitas crisis of early 2015 to the more recent E. Coli outbreak. And now, tough love from Wall Street. Chipotle Mexican Grill Inc's CMG.N shareholders have never had it so bad.
At least six brokerages slashed their price targets on the burrito chain operator's stock on Thursday, a day after the company said it was served with a grand jury subpoena related to a probe into a norovirus incident at one of its restaurants.
Chipotle's stock, once a Wall Street darling, has lost a third of its value since the end of October, when an E. Coli outbreak linked to its restaurants was first reported.
The shares were down 1.6 percent at $420.02 on Thursday.
Chipotle's announcement on Wednesday highlighted deepening problems at the chain, which has been plagued by a spate of food-borne illnesses among other issues since October.
Last year started on a sour note, when the company said it would not serve its popular "carnitas" at some restaurants after it found that a key supplier was not complying with its animal-welfare standards.
BTIG analysts on Thursday cut their price target by $134 to $530 and said the consistent negative news flow was keeping investors on the sidelines.
Analysts at Deutsche Bank, who cut their price target to $400 from $480, said until Chipotle identified the source of the outbreak, fundamentals would continue to remain challenged.
Barclays cut its target to $465 from $540. Continued...