(Chipotle Mexican Grill Facebook)
Chipotle shares were under pressure on Monday.
After the market close on Friday, the company issued a regulatory filing stating that it was expecting an 8% to 11% drop in comparable sales in the fourth quarter.
This followed news earlier in the day that, once again, the US Centers for Disease Control and Prevention (CDC) was investigating new E. coli cases linked to the fast-food chain.
Shares fell by as much as 9% in pre-market trading on Monday before rebounding. They closed down 1.5%.
Year-to-date, the stock was down about 19%.
In the filing, Chipotle said sales fell by about 22% in the days after the CDC earlier announced new E. coli cases linked to the restaurant.
In a note, RBC analysts lowered their price target on the stock to $575 from $825, while maintaining their "Outperform" rating on the stock, as they expect some sales recovery in the second half of 2016.
BTIG analysts also maintained their "Buy" rating. "We do not believe there will be any longer-term impact to the brand or its customer appeal and expect Chipotle’s growth trajectory to remain intact," Peter Saleh and Ben Parente wrote in a note.
And writing to clients, Barclays' Jeffrey Bernstein said the E. coli news was more damaging for Chipotle than other restaurants with prior investigations because of its focus on 'Food with Integrity'.
"While we continue to believe CMG the best growth story in restaurants (of size & scale), we previously struggled to recommend based on the lack of visibility on a comp reacceleration entering '16," Bernstein wrote. "And now with ongoing headlines to further pressure near-term results, we remain cautious."
Here's a chart showing the early drop in shares and the move higher:
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