Key Takeaways
- Chipotle shares fell 4.1% today after TD Cowen downgraded the stock to Hold from Buy and cut its price target to $32 from $44.
- TD Cowen expects third-quarter results to come in slightly ahead of estimates, but it says October sales are missing the fourth-quarter pickup it had expected.
- The firm now models same-store sales below consensus for the fourth quarter and 2027, and says the Street’s 3%-plus for next year relies on unproven sales drivers.
- Chipotle reports third-quarter results on Oct. 28, and its update on fourth-quarter sales to date is the number to watch.
Chipotle Mexican Grill (CMG) stock fell 4.1% today after TD Cowen downgraded it to Hold from Buy and cut its price target to $32 from $44.
The odd part? TD Cowen thinks next week’s third-quarter report will be fine. It expects results “slightly better than consensus,” but it sees “risk in the lackluster start to Q4.”
October was supposed to be the easy part
TD Cowen worries that October sales are on track to miss the fourth-quarter pickup it had expected, even though October is up against an easy month from a year ago. And according to TD Cowen analyst Andrew Charles, the fourth quarter carries Chipotle’s most concrete sales pushes of 2026: new menu items, new marketing campaigns and value offers through Chipotle Rewards.
The firm now models same-store sales below consensus for both the fourth quarter and 2027. TD Cowen says the Street’s 3%-plus for next year depends on sales drivers that are still unproven, such as high-efficiency kitchen equipment and catering.
Consensus still has Chipotle’s revenue growth speeding up, from about 9% this year to about 11% in 2027, when revenue would reach $14.4 billion.
TIKR tracks 35 analysts on Chipotle Mexican Grill. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Chipotle Mexican Grill, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Chipotle Mexican Grill’s Analyst Ratings
Cheap, and it could get cheaper
Chipotle now trades at 23.4x forward earnings. That’s its lowest in five years and well below its 41.1x average over that stretch.
TD Cowen isn’t calling the stock expensive, either. Its $32 target puts 24x on earnings two fiscal years out, and it cut its earnings estimates for the fourth quarter, 2027 and 2028.
Chipotle’s Oct. 28 update is the one to watch
Starbucks (SBUX) ruled out a bid on Oct. 12, removing that potential takeover catalyst.
Chipotle reports third-quarter results after the close on Wednesday, Oct. 28, and management will give a business update on the fourth quarter to date.
TD Cowen is right to step aside until that update says otherwise, because a multiple at a five-year low doesn’t help much if the 2027 estimates are about to come down. A solid quarter and a better October than the firm expects would make today’s drop look like an overreaction. Anything softer, and 22x stops looking like a floor.
So what is Chipotle stock actually worth?
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Disclaimer:
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