Chipotle Gets 'Hold' Downgrade On Soft Revenue, Consumer Uptake: Retail Very Optimistic

Argus said rising avocado, chicken, and pepper prices, growing competition among restaurants, and higher wage and store location costs were headwinds for the taco and burrito chain.

Shares of Chipotle Mexican Grill (CMG) fell 1.7% on Monday, after investment firm Argus lowered its rating on the company, citing soft sales.

Argus lowered its rating on the restaurant chain’s stock to 'Hold' from 'Buy' with no price target, The Fly reported. 

The analyst said rising avocado, chicken, and pepper prices, growing competition among restaurants, and higher wage and store location costs were headwinds for the taco and burrito chain.

Last Wednesday, Chipotle reported weak first-quarter sales and lowered its expectations for this year, citing higher tariff costs and sluggish consumer spending.

CEO Scott Boatwright said consumers have lowered their visits to restaurants since February, apparently to save money because of economic concerns.

Several Wall Street analysts, including Morgan Stanley, Piper Sandler, and TD Cowen, lowered their price targets on the company's shares last week following its earnings report, according to The Fly.

On Stocktwits, retail sentiment is firmly in the 'extremely bullish' territory, unchanged over three months.

A user said Chiptle's affordable prices and healthy menu make it "the Netflix in this restaurant sector."

Chipotle shares are down 15.6% this year.

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