Shares dropped 4% after a CDC-linked E. coli outbreak tied to Quarter Pounders sickened 49 people. The chain removed the sandwich from menus in affected states. The stock closed at a three-month low.
Alpha Score of 48 reflects weak overall profile with weak momentum, weak value, moderate quality, moderate sentiment.
McDonald's shares dropped 4% Tuesday after the CDC linked a multi-state E. coli outbreak to the chain's Quarter Pounder hamburgers. The outbreak has sickened at least 49 people across 10 states, with one death reported in Colorado.
The company removed Quarter Pounders from menus in the affected regions as a precaution, McDonald's said in a statement. The supplier of the slivered onions and beef patties used in the sandwich is under investigation. McDonald's said it is working with health officials and has temporarily paused distribution of the ingredients from the affected supplier.
The stock slide erased about $3.5 billion in market value. The move follows a broader sector decline as investors weigh the potential impact on foot traffic and sales. McDonald's has faced a sluggish year in same-store sales growth, particularly in its value-conscious customer base.
Analysts at several firms cut their price targets on the stock, citing the risk of a prolonged consumer pullback in the affected regions. One analyst at a major investment bank said the outbreak could weigh on sales for several quarters if the source is not quickly identified.
McDonald's shares closed at $267.50, their lowest level in three months. The stock is down about 12% year to date.
McDonald's (MCD) has an Alpha Score of 47 out of 100, a "Mixed" reading, according to AlphaScala's proprietary model.
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