Raymond James' Downgrade Of Chipotle Comes At A Very Interesting Time
Raymond James downgraded Chipotle Mexican Grill, Inc. (NYSE: CMG) to Underperform from Market perform on Tuesday, attributing the negative opinion to its expectation that lost sales could be permanent for the company.
But, interestingly, the downgrade came just as the stock hit the bottom of the trading range it's been stuck in.
As PreMarket Prep co-hosts Joel Elconin and Dennis noted, Chipotle has been in a consistent trading range from $390-$440 ever since June, when E. Coli outbreaks forced the closure of some of its restaurants.
The stock bounced off $384 in mid-June, only to top out at $443 five weeks later. Subsequently the stock fell to $387 in mid-August, before rallying back to $441 three weeks later.
Siding with Raymond James' stance, Dick said the long term outlook is scary, given the uncertainty as to when sales will come back. That said, near term, he would be a buyer, as the stock is trading at the lower end of the range.
Chipotle closed trading down 0.10 percent at $393.96.
Listen to PreMarket Prep and chat live with our hosts, guests, and other listeners every morning from 8-9:30 ET!
You can listen to the full Chipotle discussion starting at 27:04 in the clip below.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.