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Why Is Chipotle (CMG) Stock Slumping Again?

Shares of Chipotle Mexican Grill CMG are falling again on Thursday—just days after a restaurant briefly closed following an alleged norovirus outbreak—due to new reports that a storefront in the Dallas area was infested by rodents.

Several rodents were apparently spotted by customers within the restaurant on Tuesday. One diner told a local NBC affiliate that her lunch was “ruined by rodents falling from the ceiling.”

First-hand cellphone videos, which were obtained by CNBC, clearly show rodents crawling around the floor and on a wall in the store.

“We learned yesterday that mice got into a restaurant, and we immediately contacted professionals who identified a small structural gap in the building as the likely access point,” a Chipotle spokesperson said.  

“We’re having it repaired. Additionally, we reached out to the customer to make things right. This is an extremely isolated and rare incident and certainly not anything we’d ever want out customers to encounter.”

The news comes in the wake of Chipotle’s latest food safety scare, which sent the stock tumbling nearly 5.5% on Tuesday. One confirmed case of norovirus and more than 130 reports of diners being sickened at a Washington D.C.-area restaurant were enough for Chipotle to briefly close the store for a deep-clean.

On the same day, Maxim Group analyst Stephen Anderson upgraded Chipotle’s stock to a “Buy” from a “Hold,” and raised its price target price from $440 to $470.

“We acknowledge shares are going to be more sensitive than those of peers to health-related restaurant closures, but the norovirus outbreak does not appear to be serious… nor is there any evidence that the illness has spread beyond that one location,” Anderson said.

Nevertheless, Chipotle remains a Zacks Rank #4 (Sell).

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