Investing.com – Chipotle Mexican stock (NYSE: CMG ) fell 1.5% Monday following a downgrade by Raymond (NS: RYMD ) James even as the brokerage said it remains very bullish on the burrito chain's near-term fundamentals.
Analyst Brian Vaccaro downgraded the stock’s rating to outperform from strong buy due to valuation concerns. The analyst did raise the target to $2,025 from $1,800 but pointed out that the new price is still only a 7.5% upside from the Friday close.
Chipotle shares are trading over 40% higher year-to-date including a 37% up-move in the last 6 weeks.
According to the otherwise bullish commentary of the analyst, Chipotle’s recent menu price increases have been accepted by consumers with little resistance. He said the price hikes provide store margin visibility and cover the dollar impact of wage hikes the company announced in June.
In-restaurant sales are recovering and digital sales are retaining their bounce, as per the analyst.
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