Chipotle (CMG) Stock Down on Q2 Miss, Jefferies Lowers 2017 Estimates

Chipotle (CMG) stock missed analysts' estimates for its fiscal 2016 second quarter results, and Jefferies cut the company's fiscal 2017 earnings estimates this morning.
By Natalie Walters ,

NEW YORK (TheStreet) -- Chipotle Mexican Grill's (CMG) - Get Report  fiscal 2017 earnings estimates were cut to $9.42 from $9.88 at Jefferies this morning after the company missed analysts' estimates for its fiscal 2016 second quarter. 

Additionally, the firm lowered the company's price target to $330 from $350 on the stock. 

The Denver-based fast casual restaurant reported earnings of 87 cents per share, compared to estimates of 93 cents per share, and revenues of $998.4 million vs. estimates of $1.05 billion for the period. 

Same-store sales improvement is coming "more slowly than expected," according to the analyst note. Comparable restaurant sales decreased by 23.6% year-over-year in the second quarter.

Jefferies believes the second-quarter miss can be attributed more to competitive issues, rather than the food-borne illness concerns. 

The "promo-driven improvements" the Mexican restaurant is implementing for the third quarter are "not enough," the firm added.

Shares are falling 2.82% to $406.30 in pre-market trading on Friday. 

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate CHIPOTLE MEXICAN GRILL INC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strongest point has been its very decent return on equity which we feel should persist. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.

You can view the full analysis from the report here: CMG

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