Chipotle Mexican Grill (CMG) Stock Tanks on More Health Risks!

Chipotle Mexican Grill, Inc. (NYSE: CMG)

And we thought it was over… Several months ago, in October, Chipotle dealt with a big hit. The company was the epicenter of an E. coli breakout. Unfortunately, it seems as though history is repeating itself. While the reports have not yet been confirmed, it has been confirmed that a strain of norovirus has put several stores on alert and caused one store to close. This is sending CMG reeling in the market once again. Today, we’ll talk about previous cases the company has had to deal with, what we heard from the CDC after the breakout, what we’re seeing now, how the market is reacting to the news, and what we can expect to see moving forward.

We’ve Seen This Before

Recently, CMG just started to recover after a slew of E. coli and norovirus cases brought the value of the stock down in a big way. In fact, this issue goes all the way back to July. Here’s what we’ve seen with regard to Chipotle and health risks…

  • Seattle – In July 2015, five people became sick with E. coli, the source of the illness was never found. However, in August, 234 people came down with norovirus, and the source was found. The virus was spready by a sick employee.
  • Minnesota In September 64 people in Minnesota became ill with Salmonella Newport. The source of the issue was the tomatoes.
  • Nine States – In October of 2015, people in New York, Ohio, California, Delaware, Oregon, Pnnsylvania, Illinois, Minnesota, Maryland, Washington, and Kentucky fell ill with E. coli.
  • Three States – In December, E. Coli spread through three states, Kansas, Nebraska, and Oklahoma.

After all of these cases, the United States Centers for Disease Control and Prevention cleared Chipotle, stating that the breakouts were over. However, in the statement the CDC said that it did not find a source of the E. coli breakouts. They were simply stating that the breakouts were over because there had been no new cases of illness at CMG.

Is A New Breakout Going To Rear Up?

While it was expected that the breakouts at CMG were over, that may not be the case. As mentioned above, it was announced today that there may be a new breakout at Chipotle. Unfortunately, one of Chipotle’s employees in a Massachusetts branch tested positive for norovirus. As a result, several stores in the Massachusetts area were put on watch and the one that employed the sick person was closed for complete sanitization. In a statement, Chris Arnold, company spokesman for CMG had the following to say….

After learning that four of our employees were not feeling well, our restaurant in Billerica, MA was closed for full sanitization…”

How The Market Reacted To The News

It was hoped by many that the issues with regard to health risks at CMG were over when the CDC announced the end of the breakout. However, that doesn’t seem to be the case. As a result, the stock is falling in the market today. Currently (12:47), the stock is trading at $503.01 per share after a loss of $21.58 per share or 4.13% thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have a bit of a mixed opinion of what we can expect to see from CMG, and it all depends on this particular case of norovirus. If it is determined that the virus came from somewhere outside of CMG and that no CMG customers were affected, the stock is likely to move up from here. However, if there are any cases of illness among CMG customers, we can expect to see further declines.

What Do You Think?

Where do you think CMG is headed moving forward and why? Let us know your opinion in the comments below!