Chipotle news for Thursday has CMG stock taking a hit.
Chipotle (NYSE:CMG) is in the news today because the company’s stock is the subject of a downgrade. This downgrade comes from BMO Capital Markets analyst Andrew Strelzik. This has the firm’s rating for CMG stock dropping from “Market Perform” to “Underperform.”
It isn’t just a downgrade that is bad Chipotle news for Thursday. To go along with the downgrade is a new 12-month price target. This new price target is $620. The old price target for CMG stock was $675. This represents a roughly 8% drop from the previous price target.
It’s also worth noting that the new price target for CMG stock is well below the FactSet average price target. This price target average is currently sitting at $678, which is above the previous price target from BMO Capital Markets.
The new price target for CMG stock is also sitting well below its closing price on Wednesday. CMG stock was sitting at $705.88 when the markets closed yesterday. This has the new price target being roughly 12% below that closing price.
So what exactly is behind the downgrade that is bad Chipotle news? There are concerns that the African Swine Fever outbreak could result in higher prices for the restaurant chain. However, CMG argues that pork makes up a small part of its menu and that it mostly gets its meat from higher-quality sources. It says this means the outbreak is unlikely to affect it, reports CNBC.
CMG stock was down 6% as of Thursday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.