After markets closed on Tuesday, McDonald’s (MCD) stock dropped by around 6%. The Centers for Disease Control posted a warning about an E. coli outbreak in Colorado and Nebraska.
The restaurant’s Quarter Pounder hamburger is linked to the outbreak. One elderly person died and 10 people have been hospitalized. Food contamination is a rare risk for restaurant stocks. The negative development for MCD stock will help its competitors. This includes Shake Shack (SHAK), Burger King (QSR), and Wendy’s (WEN).
Watch Starbucks (SBUX) in the sector after the firm issued soft preliminary results and suspended its guidance. Global comparable store sales will fall by 7% in the quarter. It is withholding its guidance due to the CEO transition.
GE Aerospace (GE) lost 9% on Tuesday after posting third-quarter results. It earned $1.15 a share on revenue of $8.94 billion (+6% Y/Y). The reaction is unusual since GE Aerospace reported orders growing by 28% to $12.6 billion. However, the backlog is growing as a result of delays from Boeing (BA).
Investors may take advantage of the drop in GE stock by waiting for the price to fall below $160. At $176.66, the stock is below its 50-day simple moving average. Yet the forward P/E is high at 33.76 times. Investors may also consider RTX (RTX), Lockheed Martin (LMT), and Airbus (EADSY) in this sector.