Freedom Capital Markets has maintained a Hold rating on Chipotle Mexican Grill and left its price target at $38.00 following the company’s fourth-quarter 2025 results released Tuesday. That target sits slightly below Chipotle’s trading price of $39.17, while available Fair Value assessment data indicates the shares may be undervalued.
The restaurant operator marginally outperformed Wall Street expectations for the quarter, according to Freedom Capital Markets analyst Lynne Collier, but the stock has still declined substantially - down 33.63% over the last 12 months.
Earnings and top-line details
Chipotle reported fourth-quarter earnings per share of $0.25, compared with analyst forecasts of $0.24. Revenue for the period was $3.0 billion, narrowly above the expected $2.96 billion. While these results represent a modest beat, several analysts and firms have reacted by adjusting targets and reiterating views in light of the company’s guidance for the year ahead.
Guidance, margins and marketing response
Management’s fiscal 2026 guidance called for flat same-store sales and an approximate 150 basis-point year-over-year decline in restaurant-level margins. Investors appeared to respond to that guidance with concern about near-term cadence and margin pressure. To address sales headwinds, Chipotle is making changes to its marketing approach, increasing marketing spend, refreshing messaging and introducing additional limited-time offers.
Analyst reactions and target moves
Freedom Capital noted that same-store sales are likely to be uneven over the coming quarters, a view that supports its decision to keep a Hold rating and the $38 price target. Other firms issued updates following the results:
- Telsey Advisory Group reduced its price target to $48 from $50 but kept an Outperform rating, citing operational challenges despite strong reported results.
- Stifel lowered its target to $45 from $50 and retained a Buy rating, pointing specifically to concerns about the company’s fiscal 2026 guidance - flat comparable sales and margin compression.
- Wolfe Research continues to carry an Outperform rating with a $38 price target, emphasizing consistent sales momentum and robust performance from Chipotle’s digital channel.
These moves illustrate a mixed analyst landscape: recent quarterly performance exceeded expectations but forward guidance and operating dynamics prompted several firms to temper targets or flag risks.
Market context and valuation note
Despite the quarter’s upside, the stock’s year-over-year decline reflects investor caution about near-term sales trends and margin pressure. At the same time, the Fair Value assessment referenced above suggests the equity may present valuation appeal relative to current trading levels, a contrast that underpins divergent analyst stances across the sell side.
For market participants, the coming quarters will test whether Chipotle’s marketing changes and promotional initiatives can stabilize same-store sales and help rein in margin erosion.