Chipotle stock down over norovirus reports

Chipotle stock down over norovirus reports

FOOD SAFETY

Chipotle stock down over norovirus reports

Shares of Chipotle Mexican Grill fell again Monday, as analysts cut stock price targets and raised doubts about whether the burrito chain can raise menu prices to offset higher costs.

The chain’s stock shed nearly 13 percent of its value last week on reports of a norovirus outbreak at a Virginia restaurant and mice in a Dallas eatery. Shares closed down 1.5 percent to $339.98 on Monday.

Chipotle is still trying to recover from a sales-crushing string of food safety lapses in late 2015, when the chain was linked to E. coli, salmonella and norovirus outbreaks that sickened hundreds.

CFRA Research analyst Tuna Amobi on Monday chopped his 12-month price target by more than a third, reducing it by $190 to $350 per share, and downgraded Chipotle shares to “hold” from “buy.”

Credit Suisse analyst Jason West cut Chipotle’s price target to $325 from $425. “We believe the recent negative headlines may delay price increases. We now assume no additional menu pricing in 2018,” wrote West.

The Loudoun County Health Department said Monday more than 135 people reported falling ill after eating at the Sterling, Va., Chipotle restaurant from July 13 to 16. Two of those diners tested positive with the same strain of norovirus, officials said.

The restaurant was briefly closed last week; no illness has been reported since it reopened Wednesday. Chipotle will report quarterly results after the market closes Tuesday.

— Reuters

LAWSUITS

AbbVie to pay $150 million in AndroGel case

AbbVie was ordered to pay $150 million to an Oregon man who accused the drugmaker of hiding the heart-attack risks of its AndroGel testosterone booster, a loss for the company in the first case to be weighed by jurors over what was once one of its top-selling products.

AbbVie misled Jesse Mitchell, 54, and his doctor about AndroGel’s propensity for causing blood clots, which can lead to fatal heart attacks, a federal court jury in Chicago ruled Monday. Mitchell suffered a heart attack in 2012 after taking AndroGel for four years.

The panel awarded Mitchell nothing in compensatory damages tied to the heart attack and $150 million in punitive damages over its finding that AbbVie officials made misrepresentations about the product’s safety profile.

“I think it’s a strong message they sent in terms of AbbVie’s conduct,” Troy Rafferty, Mitchell’s attorney, said.

AbbVie officials have steadfastly maintained the testosterone booster didn’t cause a higher rate of blood clots.

— Bloomberg News

Also in Business

U.S. home resales fell more than expected in June as a dearth of properties amid strong demand pushed prices to a record high. The National Association of Realtors said Monday existing-home sales dropped 1.8 percent to a seasonally adjusted annual rate of 5.52 million units last month. Sales were up 0.7 percent from June 2016. There were 1.96 million houses on the market last month, down 7.1 percent from a year ago. The median house price jumped 6.5 percent from a year ago to an all-time high of $263,800 in June.

Toy maker Hasbro on Monday said its second-quarter profit jumped 30 percent, thanks to rising sales of Transformers action figures and Monopoly games. But revenue was slightly lower than Wall Street expected, and it reported weaker demand for Easy-Bake ovens and Playskool toys. Hasbro reported net income of $67.7 million, or 53 cents per share, in the three months ending July 2. Analysts surveyed by Zacks Investment Research forecast earnings of 46 cents per share. Revenue rose 11 percent to $972.5 million, just below the $973 million analysts expected, according to Zacks.

Merck and Samsung Bioepis said Monday they have begun selling a less expensive version of Johnson & Johnson’s rheumatoid arthritis drug Remicade in the United States, a move that should accelerate price declines for the medicine. The U.S. and South Korean drugmakers said they would sell their version, called Renflexis, at 35 percent discount to the list price of J&J’s top-selling medicine, or about $735 for a 100-milligram dose. Pfizer launched its own version of Remicade, Inflectra, last year and sells it at a 19 percent discount on J&J’s list price.

Motorists logged 2.2 percent more miles on U.S. roads and highways in May, the U.S. Department of Transportation reported Monday, keeping 2017 mileage on track to break last year’s record. Motorists have traveled 1.3 trillion miles on U.S. roads and highways this year through May, a 1.7 percent increase over the same stretch last year. Motorists logged 281.2 billion miles on U.S. roads and highways in May, up from 275.3 billion miles from a year earlier.

— From news reports

Coming today

9 a.m.: Standard & Poor’s releases S&P/Case-Shiller index of home prices for May.

10 a.m.: The Conference Board releases the Consumer Confidence Index for July.

All day: Federal Reserve policymakers begin a two-day meeting to set interest rates.

Earnings: Caterpillar, Chipotle, General Motors, McDonald’s.

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