This Burrito Chain Got An Upgrade From Rothschild On Strong Fundamentals And Long-Term Growth Potential – Find Out More

Rothschild said Chipotle’s near-term expectations have been reset, but its unit economics remain best-in-class, supported by a "defensible value proposition, productivity innovation, and significant white-space expansion.”

Chipotle Mexican Grill (CMG) stock witnessed an upgrade from Rothschild & Co Redburn to ‘Buy’ from ‘Neutral,’ with the firm noting that the correction in the shares reflects cyclical softness in Chipotle's growth rather than structural weakness in its growth model.

Rothschild & Co Redburn has a price target of $55 on the stock, according to TheFly. The firm said that Chipotle’s near-term expectations have been reset, but its unit economics remain best-in-class, supported by a "defensible value proposition, productivity innovation, and significant white-space expansion.”

Retail sentiment on Chipotle remained unchanged in the ‘bearish’ territory, with message volumes at ‘low’ levels, according to data from Stocktwits. Shares of the burrito chain were up 1% in premarket trading.

Rothschild now believes that Chipotle's risk and reward skews positive. The stock saw a 500% jump in retail user message count over the last 24 hours on Stocktwits.

In late August, Chipotle CEO Scott Boatwright told CNBC he believes that as economic pressures ease and spending trends pick up, customers will return to its stores in a big way, given its value proposition and innovative menus.

Last week, Chipotle Mexican Grill announced it will launch "Build-Your-Own Chipotle," a family meal offering intended to feed groups of four to six people, starting August 26. Customers can create any bowl, salad, or soft taco to their liking and dietary preferences.

Shares of Chipotle have declined by nearly 31% this year and have fallen by 22% over the last 12 months.

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