Chipotle Mexican Grill Downgraded by JPMorgan After New E. Coli Threat

In its annual report, Chipotle has noted it may be at a higher risk for outbreaks of food-borne illnesses because of its “fresh produce and meats rather than frozen, and our reliance on employees cooking with traditional methods rather than automation”. While the virus behind the illnesses is again E. coli, the CDC has identified the strain as a rare form of O26. According to preliminary tests, the restaurant patrons in Boston were sickened by another disease-causing organism called norovirus, according to reports.

All 3 Oklahoma ill people ate at a single Chipotle location in Oklahoma, and the North Dakota ill person traveled to Kansas during their exposure period and at the same Chipotle location as the Kansas ill person. Twenty people were hospitalized in that outbreak, according to previous accounts.

“We have indicated before that we expected that we may see additional cases stemming from this, and CDC is now reporting some additional cases”, Arnold wrote. It is imperative to state that post the outbreak the company had assured customers that it would tighten its food safety standards.

Of the five new cases reported, one each are from Kansas and North Dakota and three from Oklahoma, the CDC said.

However, it spread to nine states with 47 cases confirmed to be related to Chipotle, with dates ranging from October 19 to November 13.

In addition to more testing along the supply chain, Chipotle is instituting more high-tech food tracking inside its restaurants and some new procedures, including cutting, washing and testing tomatoes at central commissaries to ensure they are as clean as possible. (NYSE: CMG) stock dipped a further 0.37% during aftermarket hours, following the new E. coli threat.

The new cases prompted a downgrade of Chipotle shares to neutral from overweight at J.P. Morgan on Tuesday. It is important to point towards the fact that the stock hit a fresh 52 week low during yesterday’s trading session.