Chipotle's stock hovering around a 52-week high has one activist investor -- and noted Chipotle food lover -- pretty excited. 

"While Chipotle's reputation has been bruised, we believe that the business will ultimately recover and become stronger aided by: improved governance, increased focus on operations, appropriate marketing, technology initiatives and passage of time," wrote Pershing Square's Bill Ackman in a presentation on Monday. Although Ackman conceded the exact timing of the recovery will be "difficult" to predict, he believes that "long-term focused" investors will be rewarded.

Ackman's Pershing Square disclosed a 9.9% stake in Chipotle last September. Since then, Chipotle has abandoned its dual CEO structure by kicking out Monty Moran and installing founder Steve Ells in the top spot. The company has also moved to shake up its board of directors. Ackman praised Ells in the latest presentation, saying Chipotle is a "strong and relevant brand built by visionary leadership."

Not everyone on Wall Street shares Ackman's enthusiasm. 

"Despite all the challenges that Chipotle has endured over the past 18 months, the company's valuation remains lofty," BTIG analysts Peter Saleh and Ben Parente said in a recent research note.

Saleh and Parente said shares are currently trading at 39 times their 2018 earnings per share estimate of $12.09.

"We believe the current multiple is reflective of investor expectations for material improvement in same-store sales and unit economics in the coming year, which we believe remains too uncertain at this point," the BTIG analysts said.

Saleh and Parente said Chipotle's price to earnings multiple could fall to the low 30s, "given less obvious upside to sales and restaurant margins."

Analysts at StandPoint Research have been even more blunt.

Pershing Square's Bill Ackman.
Pershing Square's Bill Ackman.

Will Chipotle serve up a healthy first quarter?
Will Chipotle serve up a healthy first quarter?

"Chipotle is being treated like it's an "Amazon (AMZN - Get Report) , Tesla (TSLA - Get Report) , Apple (AAPL - Get Report) or Google (GOOGL - Get Report) , when in fact all they do is make burritos," wrote Standpoint Research analyst Ronnie Moas last week. Moas has a sell rating and $420 price target on Chipotle.

The burrito king is set to release its first-quarter results on Tuesday after the market's close, and analysts surveyed by Factset anticipate Chipotle to post earnings of $1.27 a share on revenue of $1.05 billion, compared to the food chain's disastrous first quarter last year when it saw earnings of 88 cents a share on $834 million in revenue.

READ MORE: Chipotle Founder Steve Ells May Want to Be Quiet - He Is Getting Creamed By Panera Bread

The Chipotle stock price surge appears largely based in response to recent headlines rather than evidence the once popular brand has returned to full health. As a result, the bulls may want to tread carefully. 

For example:

Chipotle hikes prices.

Shares of Chipotle climbed last week after the company announced it would raise its prices roughly 5% at certain locations. The move marks the first time Chipotle increased prices in three years and will impact 20% of its restaurants. BTIG began to observe the change in certain markets including in Denver and Columbus, Ohio.

Likely, Wall Street is expecting the price hike to improve the company's sales and profit performance. But, Wall Street may be losing sight of Chipotle operating in a competitive environment for pricing and traffic. In fact, sales at fast casual restaurants (what Chipotle is referred to as) were markedly weak in the first quarter despite increased promotions, TheStreet reports.

Ackman still sees Chipotle as a growth company.
Ackman still sees Chipotle as a growth company.

Will Chipotle be the next to get gobbled up?

After Panera Bread (PNRA) announced earlier this month that it would be acquired and taken private by European conglomerate JAB Holdings in a $7.5 billion deal, the question of whether Chipotle will be next is likely on the minds of many investors. After all, Chipotle's stock remains well off its all-time highs of more than $740 hit in August 2015 and the brand still has opportunities to open new restaurants aggressively.

But, that is mere speculation. First quarter results and guidance will have to deliver to keep hopes alive on these fronts.

The E.coli aftermath still lingers.

Chipotle served up E. Coli to 60 customers looking for a tasty burrito last year. Just because the company recently announced it removed all preservatives from its tortillas, does not mean people are just going to forgive and forget.

"There's probably some five to 10 percentage of customers that will never return," Wedbush analyst Nick Setyan said in a recent interview. The 60 customers who suffered from E. Coli likely are on that list.

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