NEW YORK (Reuters) - More well-publicized incidents at Chipotle Mexican Grill Inc restaurants have pushed the shares down 26 percent over the last three months, but the burrito chain is facing a more subtle threat that could weigh on the stock: it is losing favor with growth fund managers and yet remains too expensive to attract value-oriented funds in their place.

A Chipotle Mexican Grill is seen in Los Angeles, California, U.S. on April 25, 2016. REUTERS/Lucy Nicholson/File Photo

Of the 387 mutual funds that hold shares in Chipotle, only seven are value funds, which tend to focus more on a company’s price and balance sheet rather than its growth prospects, according to Morningstar data. The remaining ownership base is made up of growth-oriented funds, which tend to look past a company’s valuation in anticipation of above-market growth rates.

These growth funds have largely been selling their Chipotle shares, with high-profile funds including the Fidelity Blue Chip Growth Fund, the Fidelity Contrafund, and the T Rowe Price Growth Stock fund all trimming their positions over the last three months, according to Thomson Reuters data.

Chipotle shares, which hovered around $750 two years ago, were down more than 2 percent on Monday at $342.73. Chipotle did not respond to requests for comment.

Chipotle’s price-to-earnings valuation would have to fall under at least 30 before any value-oriented fund managers would be interested, said Nick Setyan, an analyst at Wedbush Securities. The company trades at a price to earnings ratio of 73.9, well above the broad S&P 500’s ratio of 21.9.

“We are still very far from value investors getting involved,” he said.

Setyan recently lowered his price target on the company, to $350 from $390, in part because he expects that a outbreak of Norovirus at a Chipotle location in Virginia in mid-July will prevent the company from increasing prices later this year as planned. He also trimmed his earnings per share estimates for 2018 to $11.56 from $12.88.

Lynne Collier, an analyst at Canaccord Genuity, said that the food safety concerns at Chipotle are overshadowing more structural changes as it struggles with increased competition from fast-casual chains like Shake Shack Inc and Habit Restaurants Inc.

“It’s transitioning from a high-growth name to a more normal restaurant company, and they are starting to have to spend more on advertising and make changes to their menu that they didn’t have to worry about before,” she said. The company is rolling out four new products this year, including frozen margaritas, queso cheese dip, a new salad and a cinnamon dessert.

Same-store sales have declined 17.4 percent over the last two years after food safety concerns pushed customers elsewhere, she noted, while the most recent food poisoning outbreak slashed comparable store sales by about 5.5 percent over the last two weeks of July.

A company’s transition between growth stock and a value stock can often be protracted and leave its shares lagging the market for an extended period of time, said Todd Rosenbluth, director of mutual fund research at CFRA.

“There will be a point when this stock starts to show up in value portfolios, but I don’t think that we are there yet,” Rosenbluth said. “There could be more downside risk because the stock still seems expensive to potential value managers.”