McDonald’s Corp experienced a 6.15% drop in pre-market trading on Wednesday. This decline follows a report from the U.S. Centers for Disease Control and Prevention (CDC) linking an E. coli outbreak to McDonald’s Quarter Pounder burgers.
What Happened: The CDC is actively investigating the outbreak, with 49 individuals affected, 10 hospitalized, and one fatality reported. The outbreak spans 10 states in the West and Midwest. This development comes just before McDonald’s is set to release its third-quarter earnings on Tuesday, October 29.
At the time of writing, McDonald’s was trading at $295.51 while it closed at $314.69 on Tuesday, as per Benzinga Pro.
In response, McDonald’s has removed certain ingredients used in Quarter Pounder burgers, leading to some products being unavailable in specific states. The CDC is working to identify the ingredient responsible for the outbreak.
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Adding to the situation, former President Donald Trump was seen last weekend serving customers at a McDonald’s drive-thru in Pennsylvania.
Why It Matters: The timing of this E. coli outbreak is particularly concerning for McDonald’s as it coincides with the upcoming release of its third-quarter earnings report. The potential impact on consumer confidence and sales could be significant, especially if the outbreak continues to spread or if more cases are reported.
According to the latest analyst estimates on Benzinga Pro, McDonald’s Corp has a consensus price target of $319.65, with recent ratings suggesting an 8.49% potential upside.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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