Chipotle Mexican Grill (CMG, Financial) has been downgraded to a Hold rating by Argus analyst John Staszak. The decision comes in light of increasing costs for key ingredients like avocados, chicken, and peppers. Additionally, the company faces heightened competition in the restaurant sector along with rising expenses related to wages and new store locations, making it difficult to maintain previous growth expectations.
Argus highlights that consumer sentiment is weakening, which, alongside higher menu prices, is adversely impacting customer traffic. This trend is contributing to a slowdown in same-store sales growth for Chipotle. The combination of these factors presents significant challenges for the fast-casual chain's future performance.
