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The E. coli outbreak was linked to the restaurant chain's Quarter Pounder hamburgers.
The shares of McDonald's plunged nearly 6% in premarket trading on October 23.
This is due to the E.coli outbreak that resulted in the death of one person and 49 people fell ill in the US.
"This public health scare is the last thing McDonald's needs given that it's already been struggling to drive growth," said Susannah Streeter, Hargreaves Lansdown's head of money and markets.
E.coli Outbreak Linked to Restaurant Chain's Quarter Pounder Hamburgers
The E. coli outbreak was linked to the restaurant chain's Quarter Pounder hamburgers.
The outbreak may be caused by the use of slivered onions used in the Quarter Pounder.
This may have been sourced from a single provider that supplies three distribution centres, McDonald's stated based on its initial findings.
E.coli Outbreak Cause Serious Illness
The E. coli O157:H7 strain that led to the McDonald's outbreak is said to cause serious illness. It is the same strain that killed four children in the 1993 incident at Jack in the Box.
In July, McDonald's saw a sudden drop in sales. It saw a decline in the first quarterly in a period of three years. This was due to customers looking for better deals and resisting the higher-priced options on its menu.
According to analysts, the fourth-quarter sales will get some pressure from the outbreak. It is even too early to say that it could cause a worse situation than the previous two E. Coli cases.
Previously, two major E. coli outbreaks occurring at Chipotle Mexican Grill in 2015 and Jack in the Box in 1993 have greatly impacted the sales of the companies.
Chipotle took a year-and-a-half to stabilize, while Jack in the Box sales declined for four straight quarters, Raymond James analyst Brian Vaccaro said.
The company could identify the cause of the outbreak and may fix the problem, J.P. Morgan analysts said in a note.
Adding to it the analysts said that it does not expect this to "engulf the U.S. or certainly international".