TD Cowen dropped its buy rating on Chipotle stock on soft fourth-quarter sales start

TD Cowen analyst Andrew Charles downgraded Chipotle $CMG Mexican Grill on Wednesday to a hold rating from buy, pointing to a sluggish opening to the final three months of the year, according to Bloomberg.

Charles reduced his one-year target for Chipotle stock to $32 from $44, the lowest on Wall Street, according to Bloomberg. His bear case envisions the shares sliding as low as $25. Chipotle stock was down 4.7% at $28.25 during trading Wednesday.

"The start of the quarter is showing underlying softness at a time when the business ought to be clicking," Charles, who had rated Chipotle at buy or its equivalent ever since 2019, told Bloomberg. "Now that we believe that it's more likely Chipotle is going to miss 2027 estimates more materially, we thought now is a good time to move to the sidelines."

TD Cowen now forecasts 1% same-store sales growth for the fourth quarter, down from 4%, and 2.1% for 2027, down from 3.8%, according to Bloomberg. Analysts polled by Bloomberg expect 2.9% for the fourth quarter and 3.1% for 2027.

Charles said third-quarter results should beat consensus, but he considers longer-range projections for same-store sales overly optimistic because the company is emphasizing traffic growth rather than price hikes. He called catering and high-efficiency kitchen equipment "less proven" sales drivers. Chipotle will release its third-quarter results on Oct. 28, according to Benzinga.

Wells Fargo $WFC analyst Zachary Fadem lowered his target to $40, down from $45, on Wednesday while maintaining an overweight rating, according to Benzinga. Fadem said early quarter trends are soft despite easier year-over-year comparisons, according to Bloomberg.

Chipotle stock has fallen 24% this year and trades near its 52-week low of $28.03. The S&P Composite 1500 Restaurants Index is down 6.6% in 2026.

Chipotle carries 23 buy-equivalent ratings, 12 holds and one sell, according to Bloomberg data.