Cowen reiterated its underperform rating for Chipotle shares, predicting the company's third-quarter sales will come in below expectations.
"With proprietary survey data indicating Chipotle's quality perceptions are near trough levels, we believe a more holistic brand halo is needed to sustainably accelerate sales, rather than one product as indulgent as queso," analyst Andrew Charles wrote in a note to clients Friday.
Charles cited the firm's analysis of Facebook check-in data, which revealed weaker traffic trends in the latter part of September.
"In our prior analysis we saw the Week 1 queso lift progressively decelerate through Week 2. This trend of a deteriorating lift from queso intensified through Week 3 to end 3Q," he wrote. "We view the data as supportive in our belief that queso is unlikely to be a sustainable driver of sales."
The analyst reiterated his Chipotle third-quarter comparable sales growth estimate of zero percent versus the Wall Street consensus of 2.5 percent.
He also reaffirmed his $250 price target for Chipotle shares, representing 19.5 percent downside from Thursday's close.
"We are concerned upcoming efforts to drive sales are not enough to improve these measures and in turn will not drive upside to investor same store sales expectations," he wrote. "In order for us to get more constructive on shares, a rebound in at least one of these metrics is necessary, preferably on quality perceptions given this was the brand's historic strength."
The company's stock has underperformed the market this year. It is down 18 percent year to date through Thursday compared with the S&P 500's 14 percent gain.
Chipotle spokesperson Chris Arnold sent the following statement in response to this story:
"We won't get into details on sales trends until we release our third quarter earnings later this month, but I will note that we moved queso from market-wide testing to a national rollout because we were encouraged by the results, both in terms of feedback in consumer research and sales ... What we have seen in terms of brand health and consumer sentiment is quite different than what the Cowen report suggests. We conduct ongoing research into consumer sentiment that looks at a number of brand health measures. Rather than providing a look at any single moment in time, that research provides an indication of where consumer sentiment stands on an ongoing basis. What we are seeing there is that we are closer to the levels we were seeing in early or mid-2015 (pre-crisis) than we are to the troughs, with many metrics at or near pre-crisis levels."
The company's shares declined 1 percent Friday afternoon.
— CNBC's Michael Bloom contributed to this story.