The cyclosporiasis outbreak linked to Taco Bell is hitting some restaurant stocks, but don't expect a long-term impact

The cyclosporiasis outbreak linked to lettuce at some Taco Bell locations may not have a significant long-term impact on the chain and other restaurant companies, according to analysts. The outbreak has currently affected more than 1,600 people across five states, according to the Centers for Disease Control and Prevention. The infection resembles a serious stomach bug and often begins showing up two to three weeks after people become infected by the parasite, according to the CDC. No deaths have been reported. On Thursday, the agency said its investigation into the source linked the outbreak to shredded iceberg lettuce served at Taco Bell locations in Indiana, Kentucky, Michigan, Ohio and West Virginia. The U.S. Food and Drug Administration is working with the supplier to determine if the lettuce was sent elsewhere, as well. Taco Bell's parent company, Yum Brands, saw its stock sink nearly 7% over the past five days as the company grappled with the health scare. Other food companies that sell fresh lettuce also saw their shares drop, like salad chain Sweetgreen, which plunged nearly 13% this week, and fast casual chain Cava, which sank more than 3%. Shares of Sweetgreen and Cava rose more than 17% and about 2% on Friday, respectively, due to apparent relief that the CDC did not identify their ingredients as potential sources of cyclosporiasis. While Taco Bell or other restaurant chains may take a temporary sales hit as headlines about the outbreak swirl, particularly in the states most affected by it, analysts said any dips in revenue or stock prices likely will not be prolonged. Even so, it remains to be seen whether the CDC identifies any other restaurant chains as possible sources of the outbreak. According to reports, the affected lettuce at Taco Bell may be traced back to supplier Taylor Farms, which distributes the product to many restaurant chains and sells directly in most grocery stores. Other media reports noted the company was preparing to issue a recall of ingredients on Friday. Taylor Farms, the same company linked to the McDonald's E. Coli outbreak in 2024, did not respond to CNBC's request for comment. Taco Bell said in a Thursday statement that the fast food chain is actively working to "voluntarily remove potentially impacted lettuce from a supplier in select states." "The affected ingredient from our supplier is being indefinitely removed from our supply chain nationwide and will be replaced within 24 hours in select states," the company said. Sweetgreen and other restaurant companies issued statements this week saying that they did not believe their ingredients were affected. The salad chain said it does not use iceberg lettuce on its menu. "From the outset of the investigation, we have been in close contact with our suppliers to determine whether any ingredients in our supply chain have been identified as part of the investigation. To date, none have been," the company said. Chipotle, which did not see as much stock movement this week, said in a Friday statement that shredded iceberg lettuce is not served at its locations, and it does not believe its ingredients are associated with the outbreak.