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McDonald's logo. (Photo=McDonalds) |
[Alpha Biz= Reporter Kim Sangjin] McDonald's has seen its market capitalization evaporate by nearly KRW 16 trillion in just one day due to health concerns arising from the sale of E. coli-infected hamburgers. Wall Street analysts are divided on the outlook, with some predicting continued stock price adjustments while others view this as a potential buying opportunity.
On the 23rd (local time), McDonald's shares closed at $298.57, down 5.12% on the New York Stock Exchange. This drop followed the revelation that a dangerous strain of E. coli, O157
, had been detected in their Quarter Pounder burgers. As a result, the company's market capitalization decreased by $11.563 billion (approximately KRW 15.95 trillion), falling to $214.177 billion.
The U.S. Centers for Disease Control and Prevention (CDC) announced on the 22nd that the E. coli strain linked to McDonald's hamburgers has caused severe illness, resulting in one death and 49 hospitalizations across ten states.
Given the situation, analysts predict that McDonald's stock will face adjustments in the short term. U.S. investment firm Baird has lowered its target price for McDonald's from $320 to $290, citing a downward revision of expected earnings for the fourth quarter and next year due to this incident. They advised investors to take a wait-and-see approach.
Historical comparisons suggest that similar food safety incidents can have lasting effects on stock prices. For instance, shares of Chipotle Mexican Grill, which faced an E. coli outbreak in 2015, fell over 35% in three years, while the S&P 500 rose by about 22% during the same period.
British investment bank Barclays also forecasts that McDonald's stock will underperform in the near future, maintaining a 'neutral' investment stance. Guggenheim similarly downgraded its rating on McDonald's from 'buy' to 'neutral.' Citigroup anticipates that the food safety crisis will negatively impact hamburger franchise brands, with analyst John Tower predicting that competitors like Wendy's, Jack in the Box, and Restaurant Brands International (parent company of Burger King) could also face stock price pressure as a result.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
