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Chipotle Mexican Grill, Inc. (NYSE:CMG) shares falling to $200? Goldman Sachs analyst Karen Holthouse sees it as a possibility, as she lowered her 12-month price target from $440 to $375 and maintained her Neutral rating in a note that came out Monday.
Since the most recent Chipotle illness reports went viral, analysts have been revising their estimates as they expect same-store sales to fall due to this wave of negative publicity. Holthouse followed this pattern and said investors could see nearly 40 percent of downside.
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"In the short term, we see room for additional pressure, (re-touching post food safety multiples of 20x on our 2018/2019 EPS estimates suggests downside as far as $200/$260)," she said.
Food Safety Issues Not Chipotle's Only Concern
Holthouse also pointed out a couple of other negative catalysts for Chipotle shares going forward. Specifically, she highlighted how the "recent opening of a test kitchen restaurant already concerning: Chipotle's "NEXT" kitchen restaurant that tests previously resisted ideas (e.g. queso)." However, one analyst did have a bullish take on the impact of adding queso.
See Also: Wall Street Isn't Happy With Chipotle's Latest Food Safety Scare
Holthouse also pointed towards Twitter sentiment data to back up her bearish stance.
"GS Data Works analysis of Twitter activity and negative news articles suggests a more muted reaction versus prior food safety and norovirus incidents; however, we believe it supports a moderate trim to our comp forecasts," Holthouse said.
Overall, it's still unclear how Chipotle customers are going to react to these food safety concern, but it's evident several analysts are already taking bearish stances.
To read the latest financial news and check out Chipotle's latest analyst ratings, visit Benzinga Pro.
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