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Beleaguered burrito firm Chipotle Mexican Grill making health scare headlines again

Two years ago the firm hit headlines after a string of food safety incidents battered sales. Since then it has been trying to recover...

Chipotle is back in the news

Chipotle Mexican Grill (NYSE:CMG) is back in the news and shares in the fast food chain are down 0.39%  after another health scare story.

Shares plunged on Tuesday after it confirmed several customers at a restaurant in Sterling, Virginia, reported symptoms of norovirus.

Two years ago the firm hit headlines after a string of food safety incidents battered sales. Since then it has been trying to recover.

But the burrito chain has also had a data breach, overtime pay lawsuits, and drug charges brought against a senior manager to deal with.

Analysts were today split on what to do with the shares, from an investor point of view.

Wells Fargo (NYSE:WFC), the big bank, downgraded the restaurant chain to 'market perform' from 'outperform' on the "headline" perception risk.

BMO Capital Markets also lowered its rating for Chipotle  to 'market perform' from 'outperform' and cut the price target to $350 from $550.

On the flip side, Telsey Advisory Group believes the stock's drop provides investors an opportunity to benefit from the company's longer-term plans.

Contrarily, Telsey Advisory Group reckons the share price drop provides investors an opportunity to buy into the group's longer-term plans.

 "We believe management's more aggressive plan in menu innovation (incl. current tests of Queso, margaritas, salads), technology enhancement, together supporting off-premise sales, catering and ultimately profits combine to add upside potential to our revised 2018 estimates," said Telsey analyst Bob Derrington.

The analyst hiked the rating to 'outperform' from 'market perform' and repeated a $440 price target.

Quick facts: Chipotle Mexican Grill

Price: 754.66 USD

Market: NYSE
Market Cap: $20.98 billion

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