12:31 PM EDT, 10/30/2025 (MT Newswires) -- Chipotle Mexican Grill ( CMG ) is pointing to a lower starting point for next year as Q4 is likely to record low-mid-single-digit percentage growth due to a demand slump, lower traffic, and a margin cut on higher inflation, Morgan Stanley said in a Thursday research report.

Trends continue to weaken for Chipotle, despite some efforts to mitigate impacts. Current challenges have not altered the structural story or long-term opportunity, but cyclical issues are worsening, according to the note.

The brokerage said it expects unit growth to remain robust at around 9% as per initial 2026 guidance. Pricing is expected to moderate, which, combined with higher food inflation in H1 2026 and lower sales, implies tough margins into early next year.

Morgan Stanley now expects Q4 same-store-sales to decline 3.7% from 0.8% growth previously on softer October trends. The brokerage expects Q4 EPS of $0.24 from $0.28 earlier. For 2026, it expects comps growth of 1.5% from 3.3% prior and full-year EPS of $1.17 from $1.37 earlier on current demand trends.

The Wall Street firm reiterated its overweight rating on the stock and cut its price target to $50 per share from $59.

Price: 33.99, Change: -5.77, Percent Change: -14.51