Shares of McDonald’s (MCD) fell 10% in after-hours trading after the Centers for Disease Control and Prevention (CDC) announced that an E. coli outbreak linked to the company’s Quarter Pounder hamburgers has led to 10 people being hospitalized and one death.
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The U.S. public health agency said 49 cases of E. coli contamination have been reported at McDonald’s restaurant locations in 10 states since Sept. 27. The majority of infections have occurred in the states of Colorado and Nebraska.
In a statement, the CDC said that most people became sick after eating one of McDonald’s Quarter Pounders. An older adult in Colorado died after being infected with E. coli, said the agency. E. coli is a bacteria that can cause mild to severe illness if a person eats contaminated food or drinks polluted water. Symptoms can include stomach cramps, diarrhea, and vomiting.
Number of Infections
The CDC added that the total number of people infected with E. coli by the outbreak at McDonald’s is “likely much higher” than reported, with many people experiencing mild symptoms. People often recover from E. coli without needing medical treatment.
The exact cause of the E. coli outbreak is still being determined. However, the CDC said that a preliminary investigation has found that onions might be a source of the outbreak. Sales of Quarter Pounder hamburgers are being temporarily suspended in some U.S. states, said the CDC without specifying which states.
Prior to today (October 22), McDonald’s stock had risen 8% on the year.
Is MCD Stock a Buy?
McDonald’s stock has a consensus Moderate Buy rating among 25 Wall Street analysts. That rating is based on 18 Buy and seven Hold recommendations made in the last three months. There are no Sell ratings on the stock. The average MCD price target of $313.52 implies 0.37% downside risk from current levels,
