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Takeaway: Our Restaurants analyst Howard Penney remains bearish on Chipotle. He sees an additional 35% downside.

Chipotle Shares Have 35% Downside - nypost chipotle

In case you missed it, Hedgeye's Howard Penney captured the essence of the bearish case on Chipotle (CMG) in a recent New York Post article.

Since the E. coli outbreak was announced, Chipotle shareholders have taken a significant hit. The stock is down -34% since Penney added it as a Best Idea Short on 11/16/15 ... and over -18% year-to-date.

Here's Penney's update from the NY Post story (with data provided via our survey partner CivicScience):

"By another measure, the number of diners who say they 'don’t like' Chipotle increased to 24 percent in the second quarter of 2016 — from 18 percent in the fourth quarter of 2015, according to a Civicscience brand survey released on Monday.

 

'There’s going to be a permanent group of people who won’t go back,' said Hedgeye’s Howard Penney. 'And even after three years, when Chipotle may see some improvement, their competition will have improved by then, too. They may have had their run.'"

To be clear, Penney has been the bear on CMG for a while now. (For more, click here and here.)

Bottom line? Be careful if you're betting on a bottom.