Chipotle Mexican Grill (CMG) is down but definitely not out.
In a moment of pure internet misinformation, a rumor made the rounds last month claiming the fast-casual chain was filing for bankruptcy and closing all its restaurants.
“Chipotle is closing all restaurants & is declaring bankruptcy,” one user posted on X. “The number of businesses declaring bankruptcy is very eerie.”
Except that wasn’t true.
What actually happened was that on the company’s February earnings call, Chipotle Chief Restaurant Officer Scott Boatwright confirmed it was shutting down Farmesa Fresh Eatery — a short-lived spinoff launched in 2023.
So no, Chipotle isn’t going under, but its stock has taken a hit for other reasons. Shares are down 17.5% year-to-date and 16.8% over the past 12 months.
What’s weighing Chipotle down
Like many U.S. companies, Chipotle is in Trump’s trade war crosshairs.
Investors are especially concerned about President Trump’s 25% tariff on Mexican imports not covered by the USMCA. The chain imports several key ingredients from Mexico, including avocados and red peppers.
The bigger challenge is the unpredictability. Trump has floated additional tariffs on other key trading partners, raising questions about long-term supply chain stability for companies like Chipotle.
Still, Wall Street is holding its ground.
RBC Capital Markets maintained its Outperform rating and a $70 price target this month. The firm even argued that a tariff-induced downturn could help Chipotle, which is more affordable than rivals like Sweetgreen and Cava.
Stifel also reiterated a Buy rating, trimming its price target slightly from $68 to $65.
Bernstein SocGen Group kept its Outperform rating but lowered its target from $70 to $60.
Bernstein remains bullish on the company’s international expansion, particularly in Latin America, and its strong appeal among Gen Z consumers looking for healthier fast-casual options.
Despite the generally positive long-term outlook, analysts aren’t ruling out weaker Q1 sales due to ongoing market uncertainty. Hence the lower targets.
In its latest earnings report, Chipotle said it had increased its share repurchase authorization to $1 billion, up from $700 million in Q4 2024.
Barron’s reporter Jacob Sonenshine called it a “reasonable number,” noting that analysts expect the company to generate just under $1.7 billion in free cash flow this year.
Chipotle also has no debt and nearly $750 million in cash on its balance sheet. A buyback during a downturn, he added, can also be a signal the stock is ready to rebound.
Your email address will not be published. Required fields are markedmarked