Wall Street sees a buying opportunity in Chipotle pullback

Wednesday’s drop in Chipotle ‘s stock could be a buying opportunity, according to several Wall Street analysts. Shares fell as much as 5.6% in early trading after the fast-casual burrito chain late Tuesday gave a weak same-store sales forecast for the full year and said it saw weaker traffic in January. Chipotle guided for comparable sales in the low- to mid-single digits in 2025, while analysts polled by FactSet were expecting 5.4% growth. Several analysts said that while the first half of 2025 will likely be slow, the second half of the year should be strong. “Mixed 4Q results and commentary highlighted transaction-led [same-store sales] gains and modest margin upside, while momentum should recover from early ’25 pressures moving through the year,” UBS analyst Dennis Geiger wrote in a note Wednesday. “We’re encouraged by still solid underlying traffic, even as one-off calendar/weather headwinds weighed on trends.” Geiger has a buy rating on the stock and a $70 price target, suggesting nearly 19% upside from Tuesday’s close. Citigroup also reiterated its buy investment rating. CMG 5D mountain Chipotle Mexican Grill shares over past five days “We see shares quickly shifting to the 2H narrative if honey chicken indeed comes in March, and, as such, see any N/T [near-term] softness as an enhanced buying opportunity,” analyst Jon Tower wrote in a note Tuesday, referring to Chipotle’s test of a new spicy chicken dish it began last August . On its earnings call with investors, management called the hot honey pilot a success and said the new item will roll out system-wide in mid- to late March. Tower raised his price target by $1 to $70 per share. Bank of America Securities believes menu innovation, marketing and productivity initiatives all leave room for upside to Chipotle’s comparable store sales guidance. “Assuming no tariffs (60 bps across Mexico, China, Canada), y/y food margins should improve as avocado prices lap last year’s step up in 2Q, portion investments anniversary in 3Q, and supply chain savings materialize,” Bank of America analyst Sara Senatore wrote in a note Wednesday. “Wage inflation pressures ease in April (lapping CA wage increases) and efficiencies from equipment (produce slicers, rice cookers) will grow.” On Monday, President Donald Trump paused the planned 25% tariffs on goods from Mexico and Canada for one month. However, even if the levies ultimately go into effect, Chipotle downplayed any impact , saying that about only half its avocados come from Mexico. If the tariffs go into effect, Chipotle expects the cost of sales would rise by about 0.6 percentage point. Even JPMorgan, which is neutral on the stock, said Chipotle is becoming “more interesting” thanks to the latest pullback. “Product + operational + throughput initiatives should allow CMG to power through near term volatility,” analyst John Ivankoe wrote in a Wednesday note. His price target of $64 implies more than 9% upside from Tuesday’s close.