Chipotle: Not Enough Value On The Menu Or In The Stock

2026-02-20 09:16:49 ET

Thesis and Primer

After suffering stalled and shrinking sales that sparked a sustained slide in share prices, McDonald’s (NYSE: MCD ) pivoted back towards emphasizing value . Not long after, sales began to tick up again, and the stock stabilized and even began to post some gains (and has performed especially well in recent weeks). A few other companies, like Domino’s, have also been able to stabilize and increase sales by emphasizing value, though pressures on margins and other headwinds have made for tough sledding in the fast and fast-casual restaurant scene. Against this backdrop, Chipotle’s (NYSE: CMG ) seeming disregard for value offerings strikes me as an especially risky play. I rated CMG as a sell back in May 2025, and while the slide has improved some valuation metrics, overall I still believe CMG simply doesn't offer good value for investors....

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