Barclays not surprised by ‘sell the news’ reaction in McDonald’s

Barclays keeps an Overweight rating on McDonald’s (MCD) with a $325 price target after the Centers for Disease Control and Prevention announced an E. Coli outbreak that was traced to the Quarter Pounder sandwich at McDonald’s. The firm says that although most cases of E. Coli are relatively harmless from a health perspective, it is mindful of the potentially “devastating impact” to those directly and indirectly impacted by prolonged illness, chronic residual conditions, and potential death. “The immediate damage to a brand can be severe, although ultimately overcome,” the analyst tells investors in a research note. Barclays is not surprised by the “sell the news” reaction in the shares. “Time is of the essence for McDonald’s to limit and contain the outbreaks in a swift and decisive manner,” it writes.

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