Chipotle could face more trouble after outbreak

Chipotle could face more trouble after outbreak

E. coli outbreak linked to Chipotle Mexican Grill not only affected those 45 individuals who fell ill after eating at 17 restaurants of the company, but it also gave pain to the Denver-based restaurant chain.

Analysts have predicted that investors of Chipotle Mexican Grill are going to see more volatile days. They are telling the investors that the company’s tough time isn’t over. Earlier, the company experienced a sharp blow when CMG dropped by 6% to about $574.66. When it comes to total, the company is off $157.42 per share.

Since Chipotle announced the closure of its 43 restaurants in Oregon and Washington due to E. coli outbreak, its shares have fallen more than 21%. It is estimated that investors linked to the company have lost approximately $80 million since the shutdown of 43 Chipotle stores.

Last month wasn’t easy for Chipotle as it experienced most of the drop in November. Analysts say Chipotle’s problem could be compared with some food poisoning incidents in the past. An analyst from Motley Fool said Chipotle’s crisis could be linked to events faced by Burger King, Wendy’s, Kentucky Fried Chicken and Taco Bell. In those crises, food poisoning did some damage to the companies, but they passed quickly.

The Motley Fool analyst, Daniel B. Kline, said, “The popular fast casual Mexican chain is and will continue to take a hit in both its stock price and its sales, but the impact will be temporary as long as the company gets the problem under control”.

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