Chipotle Stock Is Falling Monday: What's Going On?

Chipotle Mexican Grill inc. CMG shares are trading lower Monday as the company faces near-term pressure from lowered analyst expectations ahead of its first-quarter earnings report, despite a series of positive business developments over the past month.

What To Know: The stock's slide comes just days before Chipotle is due to report earnings for the first quarter. Analysts from RBC Capital Markets, Stifel, Oppenheimer and KeyBanc Capital Markets all cut price targets on Chipotle ahead of the report, citing reduced momentum from recent product launches and broader concerns about slowing consumer demand in the second half of the year.

Some analysts adjusted expectations due to declining enthusiasm over limited-time menu items like Chipotle Honey Chicken and signs of weaker traffic at the store level. Despite the lower price targets, all of the aforementioned firms maintained positive ratings.

BofA Securities analyst Sara Senatore also said that restaurants in general saw slower demand due to weather and upticks in food costs.

Chipotle on Monday announced significant expansion plans after signing a development agreement with Alsea to open restaurants in Mexico for the first time, targeting an initial launch by early 2026. The move marks a return to the company’s roots and adds to its growing international footprint, which already includes locations in the Middle East, Canada and Europe, as well as plans for over 300 new stores in 2025.

CEO Scott Boatwright also made clear that the company will not raise menu prices in response to new tariffs, stating the burden shouldn't be passed to consumers. He emphasized that Chipotle's low debt and strong cash position allow it to absorb the cost without sacrificing margin significantly. He also pointed to recent staffing gains and productivity improvements, driven in part by an AI assistant named Ava Cado, as signs of the company's operational resilience.

While Chipotle’s long-term fundamentals remain strong and its leadership is leaning on innovation and strategic expansion, the near-term view is clouded by market uncertainty, softer traffic trends and a cautious outlook from analysts.

Chipotle will report financial results for the first quarter after the market close on Wednesday. Analysts expect the company to report earnings of 28 cents per share and revenue of $2.96 billion, according to estimates from Benzinga Pro.

CMG Price Action: Chipotle shares were down 3.53% at $46.47 at the time of publication, according to Benzinga Pro.

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