NEW YORK (TheStreet) -- Chipotle Mexican Grill (CMG) closed down 0.73% to $412.96 on Friday after a civil lawsuit was filed against the company in the U.S. District Court for the Southern District of New York.
The lawsuit alleges that the restaurant company mislead investors about its food safety controls, Reuters reports. After multiple outbreaks of E. coli linked to Chipotle were reported across the country, Chipotle stock has fallen about 39% in the past year.
The lawsuit seeks damages on behalf of investors who acquired shares of Chipotle between February 2015 and January 2016.
"Quality controls were inadequate to safeguard consumer and employee health," the lawsuit states, according to Reuters.
Earlier this week, Chipotle announced that same-store sales plunged by 14.6% during the 2015 fourth quarter after the E. coli and norovirus outbreaks.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CHIPOTLE MEXICAN GRILL INC as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and weak operating cash flow.