A potential Starbucks takeover of Chipotle Mexican Grill could create one of the world's biggest restaurant companies, one that would serve everything from iced lattes to pork burritos. But Wall Street isn't convinced it's a good idea.

A merger of the two chains would be expensive, bring many challenges to management, and disrupt Starbucks' turnaround. What's more, Chipotle may not want to sell, especially when analysts believe its stock has plenty of room to recover on its own.

The questions arise after The Financial Times reported Thursday that Starbucks is working with advisors on a possible takeover of Chipotle, potentially reuniting CEO Brian Niccol with the burrito chain he once led.

No offer has been confirmed. Starbucks told Barron's that it remains "laser focused" on executing its Back to Starbucks turnaround strategy. Chipotle didn't immediately respond to a request for comment.

The strategic appeal of the deal is understandable.

Chipotle would give Starbucks another source of growth beyond coffee and beverages, while extending its reach further into lunch and dinner, said D.A. Davidson analyst Matt Curtis. The fast-casual chain also has substantial room to grow, with more than 4,200 restaurants and a long-term target of 7,000 locations in North America

Curtis notes that the two chains serve similar customer groups in the U.S. By combining customer data and linking their rewards programs, they could offer targeted promotions to drive more traffic and sales for each other.

Starbucks' extensive international network could help Chipotle expand overseas, but the potential benefits may be limited, said Raymond James's Brian Vaccaro. He noted that Chipotle already works with some of Starbucks' major overseas operators in the Middle East and Latin America, raising questions about how much additional help Starbucks could provide.

The two companies have little overlap in their supply chains, limiting opportunities to cut costs. Starbucks primarily sources coffee and prepared food, while Chipotle buys fresh ingredients from farms.

Sharon Zackfia, an analyst at William Blair, estimates that combining corporate operations and technology could save roughly $300 million annually.

Unlike other restaurant mergers involving largely franchised chains, a Starbucks-Chipotle combination would bring together two businesses that generate much of their U.S. profits from company-operated locations, which adds significantly more complexity, wrote Seaport Research Partners' Eric Gonzalez.

Starbucks is still working through its own turnaround, and adding another major restaurant business could distract management from those efforts.

"We wonder about the team's ability to handle the complexities and demands of both businesses simultaneously," wrote Gonzalez in a Thursday note.

Meanwhile, Curtis questioned whether it's a good choice for Starbucks to diversify away from beverages -- one of the fastest-growing restaurant categories -- into food, which generally offers lower profit margins than beverages. That means an acquisition could weigh on the combined company's profitability.

The biggest obstacle, however, may be the price.

Zackfia estimates an acquisition could cost nearly $50 billion, assuming a premium of about 20%. Starbucks already had about $9.4 billion in net debt at the end of June, according to Zackfia, borrowing enough to finance the purchase would push Starbucks' debt to an unusually high level for a publicly traded restaurant company.

The company has paused share buybacks, sold a majority stake in its China business and used part of the proceeds to repay debt, and is reportedly exploring a sale of its Japan operations. A major acquisition would represent a sharp reversal from those efforts to simplify its business and strengthen its balance sheet, wrote TD Cowen analyst Andrew Charles.

Paying with Starbucks shares would be more realistic, Curtis told Barron's. Rather than borrowing tens of billions of dollars, Starbucks could issue new shares to Chipotle shareholders. That would avoid taking on substantial additional debt, but issuing new shares would dilute existing Starbucks shareholders' ownership in the combined company.

Rather than relying entirely on either option, Starbucks could use a combination of stock and debt to fund the purchase, said Vaccaro.

Chipotle shares have fallen 15% this year amid concerns about consumer spending and rising operating costs. Its restaurant-level profit margin fell to 25.2% in the second quarter from 27.4% a year earlier, although same-store sales growth accelerated to 2.2% from 0.5% in the previous quarter.

But Wall Street generally believes the stock is oversold. Two thirds of the analysts polled by FactSet have a Buy rating for Chipotle stock, with an average target price of $44. The stock closed Thursday at $32.68. Curtis, for one, believes Chipotle has substantial room to recover on its own, with a target price of $50.

Chipotle's weaker share price could make it an attractive acquisition target for Starbucks. Even a 20% takeover premium to Thursday's close would value Chipotle at just $39 a share, below the average analyst target. That could make shareholders reluctant to accept an offer that undervalues its long-term prospects.

A higher acquisition premium, however, would make an already expensive transaction even harder for Starbucks to justify. Curtis estimates the likelihood of a completed deal at just 20%.

"If synergies are not the primary motivation, then a key question for Brian Niccol would be what he would do differently than Chipotle's current management team," wrote Gonzalez.