InvestorPlace's Jeff Reeves makes the bear case for Chipotle (CMG -0.4%), calling it a "favorite...

|About: Chipotle Mexican Grill, Inc. (CMG)|By:, SA News Editor

InvestorPlace's Jeff Reeves makes the bear case for Chipotle (CMG -0.4%), calling it a "favorite to flop." For starters, he cites runaway food inflation squeezing margins and a "nosebleed" P/E ratio of 39, before lining up the historic record of restaurants that grow too fast. "The fact is you can only build so many stores so quickly to prop up growth. Eventually the market becomes saturated or the rate of expansion is no longer large enough to materially impact earnings and sales growth."