A COVID Vaccine Setback and Chipotle’s Delivery Problem 💊

A COVID Vaccine Setback and Chipotle’s Delivery Problem

AstraZeneca – AZN

The biopharmaceutical company’s stock price fell yesterday after a volunteer in its coronavirus trials in Brazil died. Oxford University, which is partnering with AstraZeneca to create the vaccine, announced that an independent review concluded there are no safety concerns with the vaccine and that trials could go on. No further details have been released about the participants death and it is not clear if they received the vaccine.

While Oxford has played down safety concerns with the vaccine, its American trials are currently on hold after a patient in the U.K. developed unexplained symptoms. U.S. trials were expected to resume this week, but this could be a setback that delays these trials resuming and could push back eventual approval.

Chipotle – CMG

Chipotle reported earnings yesterday and if you only looked at revenue, you might think it was a great quarter. Increased delivery sales helped push revenue up 14%.

Of course, like any other business, revenue is only part of the equation. Chipotle reported a significant rise in costs, mostly as a result of higher delivery sales that hurt profits. Additionally, customers bought fewer drinks when ordering on the app compared to in person, which hurt the company because profit margins are quite high on beverages. Shares fell nearly 4% after hours following the announcement.

Keep an eye on how Chipotle deals with this challenge because it will have to walk a fine line. The company’s CFO said it is looking to raise delivery fees to offset higher costs, but it could be tough to find that number that raises profits but does not deter customers who have come to expect a certain price.

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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