By Zanub Saeed
Due to slow sales in its second quarter, Chipotle Mexican Grill lost about a quarter of its market value in early trading, said Reuters on Friday.
The result of the market value loss caused at least four brokerages to cut their price targets on the stock for the taco fast-food chain Friday morning, noted Reuters. Chipotle's shares dropped to 22.6 percent at $312.66, and even went as low as $309.01, which reportedly made them the overall biggest losers at the New York Stock Exchange on Friday.
"We continue to worry about slower growth in the second half of 2012 (in the absence of) additional menu pricing, acceleration in multiyear traffic trends, or a positive margin surprise," BMO Capital Markets analyst Phillip Juhan, who cut his target price to $410 from $440, wrote in a client note, reported Reuters.
The sales of those Chipotle restaurants that have been opened for at least 13 months as of late July rose eight percent in the second quarter, noted Reuters.
Andy Barish, who led Jefferies & Co's company of analysts, stated that Chipotle didn't have double-digit same-store sales anymore, to propel the stock.
"Same-store sales appear to have peaked, and while a marketing push could benefit traffic, we are concerned about the company's lack of organic sales-driving initiatives," Barish wrote, cutting the price target on to stock to $305 from $362, reported Reuters.
