UPDATE: Wedbush Securities Downgrades Chipotle Mexican Grill to Neutral, Lowers PT

In a report published Friday, Wedbush Securities downgraded its rating on Chipotle Mexican Grill

from Outperform to Neutral, and lowered its price target from $350.00 to $270.00. Wedbush noted, “We no longer expect increased marketing to drive incremental SSS growth ahead of expectations, and have lower confidence in another near-term price increase. Therefore, we are downgrading to NEUTRAL from OUTPERFORM. Marketing spend not enough to get over 5% SSS growth hurdle. Revenue of $701 million was below our and consensus expectations of $705 and $702 million, respectively, on 4.8% SSS growth (+1.2% price, +4.2% tx, -0.6% avg. check), in line with consensus of 4.8% and slightly below our 5%. Including $0.03 shortfall due to a bad-debt write-off from the bankruptcy of one of their building contractors, EPS of $2.30 was in line with consensus, and slightly below our $2.33 expectation. While marketing spend increased to 1.4% of sales, up from 0.7% of sales in Q2, it fell meaningfully below 2.0-2.5% guidance and our 2.1% expectation.” Chipotle Mexican Grill closed on Thursday at $285.93.