Investors are set to be burnt by Chipotle Mexican Grill Inc’s (NYSE:CMG) worse than expected results as Wall Street opens on Wednesday.
In pre-market deals the Mexican restaurant group’s stock was down US$37.30 or around 11.5% changing hands at US$287, meanwhile, Wall Street brokers started the day with some early morning downgrades.
JP Morgan dropped its target price to US$315 per share, from US$380, whereas Stifel Nicolaus moved its bar down to US$310 from US$345.
Chipotle reported a disappointing third quarter with a release after hours on Tuesday, with earnings stated at US$1.33 versus market expectations for US$1.63 per share. The quarter’s revenue was reported at US$1.13bn which was below the US$1.14bn market consensus.
“We continued to make important progress to improve the guest experience at our restaurants during the quarter,” said Steve Ells, Chipotle chief executive.
He added: “Despite several unusual impacts during the quarter, including the impact of hurricanes, we maintained our focus and saw some encouraging signs.
“Our leadership remains focused on setting the foundation for future growth, and we are confident in our teams’ ability to deliver against those plans.”