Chipotle Mexican Grill (CMG) should be able to narrow its margin gap through the year after reporting an in-line Q4 performance, BofA Securities said in a note Wednesday.

"CMG's plan to price below inflation is consistent with both prior commentary and its strategy of reinforcing its strong value proposition," the report said.

The note said inflation is expected to moderate while pricing increases modestly, narrowing the gap between input inflation and pricing.

"Less negative mix - helped by growth in catering/group orders - should also buoy margins as the year progresses," it added.

BofA cut its price target to $53 from $55 while reiterating its buy rating.

Price: 38.82, Change: -0.34, Percent Change: -0.87