03:03 PM EDT, 10/23/2024 (MT Newswires) -- McDonald's (MCD) stock is likely to react negatively to news of an E. coli outbreak linked to its restaurants, though it is still too early to assess the full impact on the company, UBS said in a note emailed Wednesday.

The US Centers for Disease Control and Prevention on Tuesday said that an E. coli outbreak in 10 states was linked to McDonald's Quarter Pounder burgers and that it was working with the fast food restaurant chain to determine which food ingredient was contaminated.

McDonald's has stopped using some ingredients for the Quarter Pounder for the time being and temporarily halted sales of the burgers in some states.

So far, 49 cases across 10 states have been reported, but risks exist that these numbers may rise, UBS said.

Still, given the initial scope of the reported outbreak, the impact on McDonald's sales may be more limited and seemingly comparable to Wendy's (WEN), which did not see any lasting impact in 2022 following an outbreak that included 109 cases and 52 hospitalizations across six states, according to the note.

"We expect McDonald's to proactively manage risk and address the situation to limit further damage, even as the impact on results is likely to take some time to assess," UBS said.

The firm maintained its buy rating and $345 price target on the stock.

McDonald's shares were down almost 5% in recent Wednesday trading.

Price: 299.24, Change: -15.45, Percent Change: -4.91