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Miller Tabak: Chipotle Mexican Grill Q1 At Risk From Pork Problem

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Chipotle Mexican Grill, Inc. (NYSE: CMG) shares could fall Wednesday on news it will suspend pork sales at a third of its restaurants, an analyst said.

Chipotle temporarily halted the sales because suppliers weren't adhering to company rules on animal welfare, according to multiple reports.

Chipotle changed hands recently down 0.3 percent at $711.96.

Miller Tabak's Stephen Anderson shaved nearly 2 percent from his first-quarter earnings forecast and reduced his estimate of same-store sales for the period to between 10 percent and 10.3 percent, from 11 percent.

Chipotle's action underscores its "efforts to build and maintain long-term trust with its customers," Anderson said.

But the potential impact on first-quarter results "cannot be denied," according to Anderson, who maintained a Hold rating on Chipotle.

About one-third of Chipotle's nearly 1,800 restaurants are affected, and Anderson expects most of the 7 percent of customers who order pork items will substitute other items on the menu.

But about 2 percent to 3 percent of customers will go elsewhere, according to Anderson, who said the disruption's duration isn't known.

Latest Ratings for CMG

Jul 2017Morgan StanleyMaintainsEqual-Weight
Jul 2017UBSMaintainsNeutral
Jul 2017JefferiesUpgradesUnderperformHold

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Posted-In: Miller Tabak Stephen AndersonAnalyst Color Analyst Ratings


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