Chipotle shares extended their slide Monday as an E. coli outbreak linked to its restaurants has the company facing its first decline in a key sales figure. Wall Street analysts were previously projecting the restaurant operator to earn $4.41 per share.
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Shares of Chipotle Mexican Grill fell over 5 percent during Friday’s after-hours trading session. However, the analyst noted that Chipotle’s timeframe for a “complete recovery” will likely be greater given its “more educated” customer base and “greater social media awareness”.
Chipotle sales have drastically plummeted since the E. Coli outbreak returned and spread for the third time. The outbreak of E. Coli bacteria is mostly occurring in the west. As of writing, there are already five people hospitalized and two have developed a sort of kidney failure – one of the severe complications from infection with this specific strain of E. Coli bacteria.Wilson said there is no problem with the retailer’s rotisserie chicken, which it continues to sell.Craig Wilson, assistant food safety chief for Costco, said the strain of E. coli that caused the outbreak was found in an onion and celery mix that was used in chicken salad.
“There must be something seriously wrong with the supply chain”. These factors will naturally limit any earnings per share upside. Cowen and Company reiterated an “outperform” rating and issued a $165.00 price target on shares of Chipotle Mexican Grill in a research note on Friday, November 27th. They joined California, Minnesota, New York, Ohio, Oregon and Washington.
Of the most recent illnesses, only one victim reported eating at Chipotle Mexican Grill in the week before their illness began. Coli levels, offering investors an “encouraging sign”. Credit Suisse restated an outperform rating and set a $675.00 price objective (down from $750.00) on shares of Chipotle Mexican Grill in a research report on Tuesday, November 24th. This brings the count of states affected by the outbreak up to nine. In September, a NY ad campaign funded by the nonprofit lobbying group Center for Consumer Freedom took aim at Chipotle’s reputation for natural foods by suggesting that while its products might be sustainably grown, they’re loaded with fat and calories.
The first cases were reported at the end of October, and the agency said the most recent illness started on November 13. It says it is adopting stricter food safety standards. In addition, visibility into any medium-term comp re-acceleration is “nonexistent”.
Shares remain Neutral rated with a price target lowered to $500 from a previous $700.
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Near 1630 GMT, Chipotle shares were down 3.2 per cent at US$543.31 after earlier falling as low as US$515.00.
