Chipotle slides after TD Cowen downgrades on sales worries, chops PT to Street-low

By Reuters News

** Chipotle Mexican Grill's CMG.N shares fall 4.8% to $28.24 on Weds as TD Cowen downgrades to 'hold' from 'buy', citing worries Oct sales may miss a Q4 inflection point and risk that a lackluster start to the qtr sets the stage for a challenging 2027

** Brokerage slices PT from $44 to $32, lowest on Wall Street; median PT is $42.25, per LSEG

** TD Cowen says it now models Street-low Q4 same-store sales increase of 1.0% and below-consensus 2027 same-store sales of 2.1%, saying less proven drivers such as high-efficiency equipment package and catering would be needed to lift traffic

** CMG may need to sacrifice pricing to prioritize traffic growth, TD Cowen says, and now sees long-term growth of about 2.5% same-store sales and low double-digit EPS growth

** Earlier this month, the burrito chain's shares surged after a report that Starbucks SBUX.O had explored a takeover deal, but days later the coffee chain said it is not buying CMG

** With the decline, CMG shares down 24% YTD vs 0.2% dip in S&P 500 Consumer Discretionary sector .SPLRCD

** 24 of 37 analysts rate the stock "strong buy" or "buy", the rest rate "hold"

** CMG slated to report Q3 results on Oct 28 after the bell

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