Shares of Chipotle Mexican Grill Inc. fell nearly 2% in premarket trade Friday after the stock was downgraded to equal-weight from overweight at Morgan Stanley and its price target was reduced to $405 from $500. The downgrade comes in light of new evidence that show Chipotle’s sales recovery from the E. coli and salmonella outbreaks will “remain more protracted” than the market expects. “A full sales recovery to prior peak volumes could take years in our view,” said Morgan Stanley analyst John Glass. The analysis was conducted through an online survey of 2,000 U.S. consumers regarding how often they shop at Chipotle and other fast casual brands. Shares of Chipotle were on track to open around $411 on Friday. They’ve declined by 11% on the last three months and 37% on the year, underperforming the S&P 500. The average rating on the stock is the equivalent to hold, while the median 12-month price target is $451.89, according to a FactSet poll of more than 20 analysts.
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