A little bit of everything that Chipotle offers its customers…

Chipotle Mexican Grill, Inc. (NYSE: CMG) closed down 0.18% at $60.49 ahead of earnings on Tuesday, but the new lower same-store sales growth and other metrics and guidance had shares down over 7% and more than 25 million shares traded hands. How will tactical investors treat Chipotle going forward after years of counting on exponential gains and growth being the norm?

Chipotle still posted impressive growth for earnings. The problem is that margin has compressed against expectations and its store openings may disappoint some of the more aggressive investors. Up until the summer, Chipotle was a stock that tactical investors could generally count on to juice their returns.

The tactical case for Chipotle now looks a bit more murky. For starters, with slower growth and lower same-store sales growth ahead, this stock at nearly $60 per shares was coming into earnings valued at about 55-times expected 2024 earnings and 46-times 2025 earnings.

Morgan Stanley reiterated its Equal-Weight rating and $65 price target. The firm’s Brian Harbour had a report signaling that nothing was really changing here (“there weren’t fireworks here”) while in absolute still a good story. His report addressed many items like store growth, new menu trends, costs and so on. It said:

These are all relatively minor deviances for a business that continues to perform very well and put up good results in absolute, though the stock setup was such that an increase to forward estimates was probably needed here. We aren’t getting that at the moment, nor did we last quarter, so some pressure on the stock seems plausible.

CFRA (S&P) raised its rating to Buy from Hold and raised its price target to $75 from $59. This is now valuing at 53-times expected 2025 earnings (at $1.41 EPS). While same-store sales growth was just under expectations, CFRA’s Arun Sundaram talked up adjusted margins, higher transactions, higher check averages, menu price increases — and sees the initial reaction as unwarranted and that inflation in certain ingredients is starting to subside, as well as other positive internal metrics Chipotle has over peers.

Here are six of the other analyst summaries with price target changes:

• BMO Capital Markets reiterated its Market Perform rating and adjusted its price target up to $56 from $55.
• Loop Capital reiterated its Hold rating, target to $58 from $53.
• R.W. Baird reiterated its Outperform rating and raised the target to $70 from $62.
• Piper Sandler reiterated its Neutral rating, price target to $60 from $59.
• Stephens maintained its Equal-Weight rating, target to $65 from $66.
• TD Cowen reiterated its Buy rating, target to $68 from $75.

In the month prior to earnings, other analysts had been changing their targets:

• Citi (10/2) maintained its Buy rating, target to $71 from $69.
• Evercore ISI (10/15) reiterated Outperform, target to $70 from $59.
• Piper Sandler (10/11) maintained Neutral, target to $59 from $56.
• Truist (10/15) maintained Buy, target to $71 from $69.

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Shares of Chipotle closed down 7.8% at $55.76 on Wednesday. Its 52-week trading range is $38.83 to $69.26. As a reminder, all formal ratings and formal price targets expressed here on Chipotle were issued by each outside firm independently.