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Sell Chipotle on 'permanent' lost sales, Raymond James says

A employee sprinkles cheese on a burrito at a Chipotle Mexican Grill restaurant in Hollywood, California.
Patrick T. Fallon | Bloomberg | Getty Images

Raymond James lowered its rating for Chipotle Mexican Grill to underperform from market perform, citing the prospect the company will struggle to win back customers after its food safety episodes.

"We are increasingly of the view that lost sales (still down 15-20% nearly a full 12 months after the initial E.coli incident) could prove to be more permanent in nature, which creates additional downside risk in the stock," analyst Brian Vaccaro wrote in a note to clients Tuesday.

Chipotle is scheduled to announce third-quarter financial results on Oct. 25.