Market Overview

Online Sentiment For Chipotle Is - Surprise - Not Good

Share:
Online Sentiment For Chipotle Is - Surprise - Not Good

Following Chipotle Mexican Grill, Inc. (NYSE: CMG)'s disastrous week when shares fell over 12 percent, sentiment continues to be negative. Credit Suisse analyst Jason West lowered his price target from $425 to $325 with a Neutral rating.

The million-dollar question analysts have been trying to answer is whether this past week would have a huge impact on Chipotle’s same-stores sales. West sees these instances having a huge effect on Chipotle and anticipates sales falling after looking at sentiment data (see his track record here).

These Outbreaks Should Have A Negative Effect On Same-Store Sales

“Not surprisingly, online sentiment plummeted in recent days. Daily net sentiment fell from 55 on July 17, to -11 on July 18. Sentiment "improved" to 12 and 16 on July 19 and July 20, resp., though these are still depressed figures by historical standards," West said.

To put these numbers in comparison, following the E. coli and Boston norovirus incidents in 2015, online sentiment averaged 24, and this was the low point.

In the past, this data has had a 76 percent correlation with Chipotle’s same-store sales, and “this data suggests SSS have likely fallen to at least negative 10% in recent days, if not worse. Previously, we had been modeling +10% SSS for the month of July and +7% for 3Q17,” West noted.

Expect Slower Unit Growth Going Forward

While it is possible that these headlines fade and sales trend improve, however, West believes the effects of multiple food safety events since 2015 having a large effect. Thus, he lowered his Q3 and Q4 same -store sales estimates, expects Chipotle to delay price increases and to slow down store growth.

To read about the latest news financial news and to explore Chipotle’s current analyst ratings, visit the Benzinga Pro news wire.

________
Image Credit: By Guillaume Capron from Issy les Moulineaux, France [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

Latest Ratings for CMG

DateFirmActionFromTo
Oct 2019MaintainsOverweight
Oct 2019MaintainsMarket Perform
Oct 2019UpgradesUnderperformHold

View More Analyst Ratings for CMG
View the Latest Analyst Ratings

Posted-In: Credit SuisseAnalyst Color News Price Target Reiteration Restaurants Analyst Ratings General Best of Benzinga

 

Related Articles (CMG)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
SWKSCascendReiterates100.0
IBMWells FargoMaintains140.0
PNCWells FargoMaintains147.0
TWOUDA DavidsonMaintains17.0
IDYAOppenheimerInitiates Coverage On17.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Mid-Day Market Update: Hibbett Sports Tumbles Following Q2 Guidance; Neuroderm Shares Plunge

Petmed Express Makes New All-Time High After Q1 Beat