Photo: SmellsLikeCactus on Flickr
Chipotle is down over 2% today on analyst downgrades made this week by Morgan Keegan and Cowen and Company. The stock was up as much as 7% last Thursday after posting a way better-than-expected earnings.
However, it seems that the hype over the earnings report died down over the weekend.
“While management has done a masterful job growing its culture, same-store sales growth, store base and operating results, creeping margin pressures from escalating food and labour costs are projected to restrict EPS growth and possibly CMG’s premium valuation,” wrote a Morgan Keegan analyst in a research note.
Analysts may also be factoring in the company’s immigration problems in addition to having to deal with the headache of commodity inflation. Last week the company said it wasn’t sure if it would change its hiring practices because of a recent federal probe that forced it to fire hundreds of employees.
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