Hey, Chipotle, Maybe Dumping ShopHouse Was a Mistake

Hey, Chipotle, Maybe Dumping ShopHouse Was a Mistake

Shares of Chipotle Mexican Grill (NYSE: CMG) were slammed on Tuesday following reports of a food-borne illness outbreak, and on Wednesday morning, it was time for Wall Street pros to follow suit. Analysts at Wells Fargo and BMO Capital went on to downgrade the former fast-casual bellwether.

Robert Derrington at Telsey Advisory went the other way, approaching the fear-fueled sell-off as a buying opportunity. He's boosting his rating from perform to outperform, but he's been the exception to the rule. Most of the market is now bracing for a setback similar to late 2015, when several food-borne illness outbreaks creamed the stock.

Chipotle got rid of ShopHouse Southeast Asian Kitchen earlier this year, and it's been slow to develop its Pizzeria Locale concept. Having one or two needle-moving chains beyond Chipotle would've come in handy right now when its namesake eatery is dealing with another reputational attack.

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Source: Fool.com