110 salmonella cases tied to Chipotle jalapenos; stock lost 8.8% on Tuesday. The Minnesota health department says other restaurants were also affected.
Alpha Score of 48 reflects weak overall profile with weak momentum, poor value, moderate quality, moderate sentiment.
Chipotle Mexican Grill shares slid 8.8% on Tuesday after the Minnesota Department of Health linked a salmonella outbreak to jalapenos served at the chain. The company said it pulled the peppers from its restaurants and swapped in product from a different grower.
The health department has identified 110 cases in the state, most of them tied to Chipotle locations. Customers who ate at the chain between mid-June and mid-July reported symptoms, the department said. Carlota Medus, senior epidemiologist supervisor in the department's Foodborne Diseases Unit, said the contaminated food was also served at other restaurants, not just Chipotle.
"Based on all the evidence so far, the food that made people sick was served at other restaurants as well," Medus said in a statement.
Chipotle said it removed the jalapenos proactively. "The Minnesota Department of Health has confirmed it has no ongoing concerns with Chipotle," the company said in a statement. It is cooperating with the investigation.
The U.S. Food and Drug Administration said it is examining multiple ingredients. The FDA said Chipotle was coordinating with state partners to review its supply chain.
The stock closed down $3.28. The move erased about $900 million in market value.
Chipotle has been here before. The chain suffered a multi-state E. coli outbreak in 2015 that sent sales into a two-year tailspin. The company overhauled its food-safety protocols after that, centralizing ingredients and instituting DNA-based testing. Tuesday's drop shows investors are not assuming a similar outcome will be avoided.
The question is whether this is contained to one state's produce lot or something broader. Medus said it was "too soon for us to know if the outbreak is ongoing." For a stock trading at 50 times earnings, that uncertainty priced in fast.
The CMG stock page tracks post-outbreak positioning data.
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