ANALYST: Chipotle is due for a 40% jump

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A Chipotle Mexican Grill is seen in Los Angeles, California, United States, April 25, 2016. REUTERS/Lucy Nicholson

Thomson Reuters

Chipotle's stock is currently the lowest it's been in almost three years. But according to John Zolidis, an analyst at the Buckingham Research Group, that's going to change.

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Zolidis expects a 40% increase, and sees the current low price as the perfect investment opportunity.

After Chipotle's E. coli outbreak last year, sales plunged; its stock is now trading at about half its all-time high. People are wondering if Chipotle will ever recover.

Zolidis, however, is more optimistic. Yes, he thinks it will continue to fall for a bit, and anticipates a 20% decline in sales for this quarter. But ultimately, Chipotle is too good of a company to give up on.

Chipotle is eventually going to "recover its consumer appeal [and] higher sales margins," the report states - so "investors should buy the stock ahead of this event."

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Simply put, people are starting to eat there again, and they'll continue to do so. Business is already picking up, and there are signs that foot traffic is growing again. Barring the worst-case scenario of another food safety issue, Chipotle's brand perception shouldn't be permanently damaged. According to Zolidis' analysis, recovery isn't a matter of if, just when, and the payoff could be huge.

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