Online reviews for Chipotle signal something potentially very worrying for the brand (CMG)

Analysts at UBS’s "Evidence Lab" looked at roughly 130,000 online reviews of the Mexican chain to see how marketing efforts and grim headlines were affecting customer perceptions, and things aren't looking good.

“Online review scores showed improvement in the early part of 2017, with scored declining more recently and are now approaching historic lows,” analysts Dennis Geiger and Lauren Silberman write.

“We view deteriorating trends over time as potentially cautionary, raising possible brand perception concerns & larger structural issues," they added.

Despite an uptick after a wave of sickness outbreaks across the country over the past two years appeared to subside, a fresh norovirus outbreak in Virginia last month sent online review ratings — and the restaurant's stock — plummeting once again.

UBS also analyzed the frequency of references to "lines" as a proxy for traffic. That analysis also represented bad news for Chipotle.

"Notably, 'line' mentions have hit historic lows recently, with the share of reviews mentioning 'line' now below the post-food safety incident bottom," UBS said. "A portion of the decrease in mentions could be attributed to increased digital utilization, improved operations, and throughput gains, but could also suggest that restaurant lines are not building, with sales volumes still relatively low."

The bank sees limited evidence that same-store sales could surpass Wall Street expectations next year, as sales initiatives like coupons and ad spots draw in traffic. Here's how the bank sees online review scores over time:

“However,” the bank warns, “the efficacy of the advertising campaign, uncertain timing of new menu items, cadence of price increases, and impact from recent negative illness incident press limits visibility.”

A food safety expert told Business Insider last month that it all comes down to psychology.

“I think that a lot of it just has to do with the fact that people are very acutely aware of what happened at Chipotle in 2015," said Bill Marler, a food safety advocate and attorney. "To have a norovirus outbreak, E. coli outbreak, salmonella outbreak is unprecedented. So, I think that, along with media and social media, heightened people's attention."

Chipotle stock is currently trading at $343 per share, 17% below it’s 12-month high of $499. UBS’s price target is $380.

Online reviews for Chipotle signal something potentially very worrying for the brand (CMG)

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