By Siddharth Cavale and Sruthi Ramakrishnan
(Reuters) - Chipotle Mexican Grill Inc's <CMG.N> shares slumped to their lowest in nearly five years after disappointing results on Tuesday suggested that the burrito chain's recovery from a food-safety scandal would take much longer than expected.
Shares fell 15 percent to $277 in early trading on Wednesday.
At least nine brokerages cut their price targets on Wednesday. Canaccord Genuity analyst Lynne Collier was the most bearish on the stock on Wednesday, cutting her target by $75 to $325.
Chipotle On Tuesday reported weaker-than-expected same-store sales, despite introducing its highly promoted spicy cheese Queso dip, and said it would increase prices by 5 percent at a third of its restaurants.
"Despite some sales lift from queso and pricing, we view this result and outlook as disappointing, particularly for those looking for a more meaningful recovery," Credit Suisse analyst Jason West said in a research note.
Chipotle has been struggling to recover from a bruising string of food safety lapses that started in late 2015, which has pushed down the value of its stock by more than half since touching a record high in August 2015.
Of the 35 analysts covering the stock, 22 rate it a "hold," and five analysts have a "sell" rating. The rest rate it "buy" or higher.
"We continue on the sidelines given our belief that a sales recovery will take longer than many investors expect as we maintain that competitive intrusion is the most significant long term issue for Chipotle," Canaccord's Collier wrote in a note.
Once a favorite with customers seeking fresher, healthier options, Chipotle has lost ground to McDonald's Corp <MCD.N> that has been attracting customers with revamped stores and new menu items such as its hit All-Day Breakfast and premium burgers.
McDonald's on Tuesday reported market-beating same-store sales.
Chipotle said comparable sales so far in the fourth quarter quarter-to-date were up 2-3 percent, but did not issue longer-term outlook, leading analysts to say this eroded some of their confidence in the company's turnaround.
The median price target on the stock - the most shorted among U.S. restaurants - has dropped 15 percent to $325.58 in just one month, Thomson Reuters data shows.
More than 19 percent of Chipotle's float, or shares available for trade, were sold short as of Oct. 13, signaling Wall Street's bearish sentiment on the stock.
"The fundamental trends haven't stabilized yet which makes us remain on the sidelines," said Brad Lamensdorf who co-manages the AdvisorShares Ranger Equity Bear ETF.
"I think the pattern is that you will continue to see a high level of shorting until they can turn things around."
(Reporting by Sruthi Ramakrishnan and Siddharth Cavale in Bengaluru; Additional reporting by Tanya Agrawal; Editing by Sayantani Ghosh)