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Should You Buy Shares Of Chipotle Or Beyond Meat Following Price Target Changes?

September 16, 2021 9:46 am
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Should You Buy Shares Of Chipotle Or Beyond Meat Following Price Target Changes?

Piper Sandler raised its price target on Chipotle Mexican Grill Inc (NYSE:CMG) but lowered the price target on Beyond Meat Inc (NASDAQ:BYND) on Thursday morning.

Douglas C. Lane & Associates' Sarat Sethi is avoiding both of the stocks on valuation concerns, he said Thursday on CNBC's "Squawk Box."

What Happened: Piper Sandler analyst Nicole Miller Regan maintained Chipotle Mexican Grill with an Overweight rating and raised the price target from $2,235 to $2,600.

Piper Sandler analyst Michael Lavery downgraded Beyond Meat from a Neutral rating to an Underweight rating and lowered the price target from $120 to $95.

See Also: The Past Week's Notable Insider Buys: Chipotle, Krispy Kreme, Petco Health And More

Sethi's Take: Beyond Meat is facing a valuation issue, Sethi said: "It's very highly valued and the expectations built in are pretty high so they've got to meet those."

Beyond Meat is trading at more than 15 times price-to-sales, according to data from Benzinga Pro.

Chipotle's stock is also trading at a very high valuation, he said, adding that it's currently being valued at about 37 times earnings.

"I just find, trading at these valuations, if they make one mistake, these stocks can get cut pretty badly," he said.

Sethi doesn't own either of these stocks nor does he have any plans to buy them at such high valuations.

CMG, BYND Price Action: Chipotle Mexican Grill was up 0.21% at $1,884, while Beyond Meat was down 2.90% at $107.60 at time of publication.

Photos: courtesy of Chipotle Mexican Grill and Beyond Meat.

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