Photographer: David Paul Morris/Bloomberg

Chipotle Drops Again After Analysts Predict Tough Year Ahead

Chipotle Mexican Grill Inc., struggling to rebound from a string of foodborne illnesses, fell 6.5 percent in New York trading after analysts predicted a tough 2016 for the restaurant chain.

The company is unlikely to see same-store sales grow again before 2017, Maxim Group analyst Stephen Anderson said in a report. He now expects Chipotle’s stock to drop to $435 over the next 12 months, down from an earlier target of $495. Oppenheimer & Co. analyst Brian Bittner also took a dimmer view of the company on Monday, cutting his rating to the equivalent of hold.

Chipotle’s reputation was battered in recent months by an outbreak of E. coli that afflicted at least 53 people in nine states. That was followed by a norovirus contagion at a Boston location that sickened more than 140 college students. A new spate of illnesses in three additional states was announced by the U.S. Centers for Disease Control and Prevention late last month.

Chipotle has already predicted a same-store sales decline of as much as 11 percent for the fourth quarter. But based on Maxim’s own checks, Anderson expects the deterioration in customer traffic to be even worse. He estimates a sales drop of 13.5 percent for the quarter.

The stock fell to $448.81 on Monday, the biggest single-day decline in more than a month. After losing 30 percent of their value last year, the shares are trading at their lowest level in more than two years.

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