On Tuesday, shares of Chipotle (NYSE:CMG) fell to their lowest level. The Denver-based food company has suffered six straight days of decline. The E. coil scare at the several restaurants is still haunting the company. The most recent round of selling Chipotle stock comes in the aftermath of a bearish report from Deutsche Bank analyst Brett Levy. Levy wrote that Chipotle's profit margin potential is now highly uncertain as sales continue to decline. Levy said that some customers "may be lost for good." According to CNN, Levy indicated that shares of the Chipotle should be sold. He cut his price target to $340. Chipotle is currently trading at around $390.
Chipotle has push and increased its marketing in order to win back customers. Chipotle recently did a free burritos promotion in its North American stores. According to the Denver Post, company executives insisted that the chain can make it sales and industry-leading margins once the customers return.
The Denver Post spoke with Jennifer Bartashus, an analyst at Bloomberg Intelligence talked a bit about the E. coli outbreak and indicated that “Because many of Chipotle’s locations are in states with confirmed cases, it has been difficult to regain sales momentum. The recovery might take 12 to 18 months, she said.”
The Harris Poll conducted a recent customer survey. The results of the survey showed that many customers now prefer to get the Tex-Mex food from Moe’s Southwest Grill instead of Chipotle. Chipotle is also facing more competition from Odoba which is owned by Jack in the Box (NASDAQ: and )Yum! Brands’ (NYSE: Taco Bell. )
The stock was trading at $393 in late morning Tuesday.The stock slipped to 2.3 percent on Tuesday to $384.77. The company has now dropped in 11 of the past 13 trading days possible to due to lingering concerns over last year’s E. coli outbreak.