TSC Ratings' Updates: Allergan

ADI had been rated a buy since May 13, 2008.

Chipotle Mexican Grill(CMG Quote) has been downgraded from hold to sell. Chipotle Mexican Grill engages in the development and operation of fast-casual, fresh Mexican food restaurants. Chipotle Mexican Grill operates independently of McDonald's as of Oct. 5, 2006. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

CMG's revenue growth has slightly outpaced the industry average of 23.4%. Since the same quarter one year prior, revenue rose by 24.2%. Growth in the company's revenue appears to have helped boost the earnings per share.

CMG's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.82, which clearly demonstrates the ability to cover short-term cash needs.

The return on equity has improved slightly when compared with the same quarter one year prior. This can be construed as a modest strength in the organization. Compared with other companies in the hotels, restaurants & leisure industry and the overall market on the basis of return on equity, CMG has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.