He also lifted his share-price target to $1,700 from $1,600.
The upgrade stems from the following factors, Rutherford said.
“1. The stock has traded off since mid-April along with overall weakness in growth stocks.
“2. The long-term picture for same-store sales is better than it ever has been with an increasing mix of sustainable digital sales.
"3. CMG … is very well positioned for growth: excellent demographics, low urban core exposure, strong presence in the suburbs, an opportunity to grow in outside towns, very low closure rates across all vintages.
“4. Chipotlanes [drive-through] are an underappreciated part of the CMG story.
“5. There are ongoing near-term sales drivers including reopening, new long-term opportunities (brisket being tested), digital growth, a return of dine-in sales, a bigger ad budget."
Chipotle recently traded little changed around $1,345. It has gained 5% over the past six months, compared with 16% for the S&P 500, amid investor concern about the stock's valuation.
The analyst's new target price indicates 26% upside from Wednesday's closing price.
Earlier this month, Chipotle said it’s raising its hourly restaurant wages to an average of $15 by the end of June.
And it will hire 20,000 extra workers across 200 restaurants in the U.S. to accommodate its peak-season traffic.
After Chipotle reported first-quarter earnings last month, TheStreet.com Founder Jim Cramer said it was a good time to purchase the stock.
Revenue rose 23% in the quarter to $1.74 billion and was in-line with estimates. Same-store sales climbed 17.2%.