BUZZ-TD Cowen downgrades rating due to sales concerns, Chipotle shares fall to Wall Street's lowest target price

October 21 - ** On Wednesday, Chipotle Mexican Grill (CMG.N) shares fell 4.8%, closing at $28.24, after TD Cowen downgraded its rating from "buy" to "hold" due to concerns that October sales may not reach a turning point in the fourth quarter, and that a sluggish start to the quarter could pose challenges into 2027.

** The brokerage lowered its target price from $44 to $32, the lowest on Wall Street; according to LSEG data, the median analyst target price is $42.25.

** TD Cowen said its current model forecasts fourth-quarter same-store sales growth of 1.0%, the lowest on Wall Street; for 2027, same-store sales growth is projected at 2.1%, below market consensus. The firm noted that to boost traffic, the company will need to rely on growth drivers such as efficient equipment bundles and catering services, which have not yet been fully validated.

** TD Cowen said CMG may need to sacrifice pricing in order to prioritize traffic growth, and now expects long-term same-store sales growth of about 2.5%, with earnings per share (EPS) growth rate in the low double-digits.

** Earlier this month, it was reported that Starbucks SBUX.O had explored an acquisition, causing the burrito chain's share price to soar, but days later the coffee chain said it would not acquire (link) CMG.

** As a result, CMG shares are down 24% year-to-date, while the S&P 500 Consumer Discretionary sector index has fallen just 0.2% .SPLRCD.

** Of 37 analysts, 24 gave the stock a "strong buy" or "buy" rating, while the rest rated it "hold."

** CMG plans to announce its third-quarter financial results after the U.S. market closes on October 28 (link).

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