Is Chipotle Too Spicy?

If people won't pay up for leather bags, will they still buy pricey, albeit delicious, burritos?

It's a question Chipotle investors might want to ask.

High-end retailers have been a safe haven of sorts, with the thinking being that the rich are immune to high unemployment and even higher gas prices. But the selloff in names like Coach , Ralph Lauren, and Tiffany's has temporarily debunked that thesis.

So if the rich are feeling a little poorer, wouldn't it stand to reason that high-end fast food might be a bit overpriced? Yet shares of CMG are only 5% off their all-time high, and the stock trades at 47 times next year's earnings.

So what gives?

"Chipotle is a market share name," said D.A. Davidson & Co's Bart Glenn (BUY $400 PT). "They're killing competitors and can pass along national price increases. "

Still, some investors remain unimpressed with the Mexican fast food giant, despite recent market trends.

"High growth, high short-interest names like Lululemon have worked well all year," said Options Action contributor Dan Nathan, who recommended a bearish options trade on CMG on his website riskreversal.com this morning. "But at some point, those types of stocks will be the last men standing, and they will fall and fall hard."

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