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Chipotle's stock heading south of the border

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Fast food Mexican restaurant Chipotle Mexican Grill Inc (NYSE: CMG), a spin-off of McDonald's Corporation (NYSE: MCD), is down a little over 2% today after a negative Barron's Online article.

The Barron's "Weekday Trader" article stated that after hitting an all-time high yesterday, the stock is due to fall. It cites two downgrades of Chipotle from earlier this summer, the rise in the prices of ingredients, and the fact that Americans are eating out less.

With as much market uncertainty as we are seeing, and the fear the uncertainty is causing among investors, stocks trading at such high multiples -- such as Chipotle's 54x 2007 P/E ratio, are due to fall. The only question now is -- how far?

Editor's Note: Special shout out to BloggingStocks' own Georges Yared, who is quoted in the Barron's article.

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Last updated: July 04, 2009: 12:40 AM

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