Shares of Chipotle Mexican Grill Inc. tacked on 0.7% in premarket trade Friday, after Raymond James finally backed off from its bearish stance on the Mexican food quick-service restaurant chain, saying it no longer sees material downside risk to 2018 estimates. Analyst Brian Vaccaro raised his rating to market perform, after being at underperform for the past 15 months. Vaccaro said his view of a more stable earnings outlook comes after Chipotle confirmed earlier this week menu price increases impacting nearly half its restaurants, and given stabilizing industry demand trends. “While not out of the woods given 4Q traffic likely remained negative and [quarter-to-date] trends were likely negatively impacted by another norovirus incident in late December (Los Angeles), we view the stock as fairly valued on firmer 2018 estimates and see a more neutral risk/reward from current levels,” Vaccaro wrote in a note to clients. The stock has gained 3.8% over the past three months through Thursday, but has lost 17.5% over the past 12 months, while the S&P 500 has gained 23.6% the past year.
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