Chipotle Mexican Grill's sluggish sales and struggling brand perception spell more downside for investors, UBS said Thursday.
"Online review trends have continued to trend downward and have now dropped below pre-food safety crisis lows," analyst Dennis Geiger wrote in a note to clients. "Despite aggressive efforts to improve brand perceptions through a new national advertising campaign and the launch of new products including queso recently, customer review scores have not shown any signs of improvement."
Geiger downgraded Chipotle shares to sell from neutral and slashed his price target to $290 from $345. The new target represents 11 percent downside from Wednesday's close.
Shares were down more than 4 percent Thursday afternoon.
Chipotle, whose products include tacos, burritos and salads, has tried to assure customers about the quality of its food after a string of food safety incidents first hamstrung sales in 2015.
Source: UBS, UBS Evidence Lab
Despite vigorous ad campaigns, food safety concerns resurfaced in July after the company confirmed that several customers had fallen ill with norovirus after eating at one of its restaurants in Sterling, Virginia.
Chipotle Mexican Grill did not immediately respond to CNBC's request for comment.
UBS's analysis of more than 230,000 Chipotle reviews found that food safety, coupled with mounting competition, has proven a tough hurdle.
"Food safety issues likely gave customers a reason to try a new brand or return to more mature brands," Geiger said. "The increasing penetration of fast casual brands and traditional quick service restaurants (QSR) has likely weighed on Chipotle's efforts to regain lost customers. In the aftermath of the Chipotle food safety incidents, our survey analysis indicated 'like other QSR better' as the second most cited reason for eating less at Chipotle."
Source: UBS, UBS Evidence Lab
Shares of Chipotle are down 54 percent over the past three years, down 23 over the past 12 months, but up 12 percent year to date.