The road to recovery is looking longer than ever for Chipotle Mexican Grill. Wedbush Securities downgraded the restaurant chain's stock on Tuesday, sending shares in the fast-casual chain down more than 4 percent during midday trading.
The investment firm said that Chipotle will not recover its sales loss from the norovirus, salmonella and E. coli outbreaks it suffered in the last year until 2018 — and they believe that's the best-case scenario.
"Based on our belief that current valuation reflects an overly optimistic outlook regarding Chipotle's path to recovery, we downgrade shares to underperform from neutral," the team wrote in a research note.
Wedbush analysts also said that there is no reason for investors to own shares in the fast-casual restaurant as "unit economics may not rebound even if sales do." It cut Chipotle's target stock price to $400 from $450.
Chipotle did not immediately respond to CNBC's call for comment.
Earlier this month, Chipotle reported that it gave away about 9 million free burritos in an attempt to entice customers back to its chains.
Executives speaking at an investment conference in early March said the company has recovered about a third of sales lost to a string of food safety lapses last year, and more free offers may be forthcoming as part of its turnaround strategy.
The formerly high-flying burrito chain plans to send another 21 million free-food coupons via snail mail to U.S. consumers. Chipotle expects roughly a quarter of those coupons to be redeemed.
Based on a burrito cost of $7.10, the average price of burritos offered at the chain in Los Angeles restaurants, the value of Chipotle's giveaways would total more than $62 million.
Free burritos may increase foot traffic, but it's not sustainable, Wedbush analysts say.
"We model a gradual rebound in traffic through 2016, with upped near-term marketing the lone driver to point to," Wedbush analysts noted, adding that Chipotle's ability to sustain sales without using coupons has yet to be proven.
—Reuters contributed to this report.