Tim Rokossa, an analyst from Deutsche Bank, has initiated a new Buy rating on McDonald’s (MCD).
Tim Rokossa has assigned a Buy rating to McDonald’s (MCD) based on a variety of factors. These include the company’s resilient business model, its value proposition, and its position to maintain global momentum irrespective of shifts in the consumer environment. The consistent execution, high earnings visibility, and the current economic backdrop make MCD an attractive investment with potential for a favorable risk/reward ratio. The company’s stock is trading at 21x P/E and 15.5x EV/EBITDA, which is below the 5-year average, indicating a potential for growth.
The analyst acknowledges McDonald’s impressive global same-store sales (SSS), which have shown consistent double-digit growth from 4Q22 to 2Q23, indicating broad-based momentum and market share gains. This growth is expected to continue, hinting at a strong underlying strength. McDonald’s has outperformed peers in the US market, which accounts for 40% of system sales, and consistently delivered positive US SSS from 2007-2010, demonstrating the brand’s global resilience and defensive positioning. Additionally, the company’s unit growth, supported by strong fundamentals, healthy franchisees, and global expansion opportunities, is seen as an opportunity for upside, with an anticipated acceleration to 3.7% from 2023-2025.
In another report released today, Guggenheim also maintained a Buy rating on the stock with a $285.00 price target.
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Based on the recent corporate insider activity of 33 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MCD in relation to earlier this year.
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McDonald’s (MCD) Company Description:
Founded in 1955, McDonald’s Corp. is world’s leading fast food chain that operates and franchises over 30,000 restaurants in more than 100 countries. More than 90% of McDonald’s restaurants are owned and operated by independent local business owners. Its popular products include Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, Chicken McNuggets, McDonald’s Fries, McFlurry desserts, and McCafé beverages, among others. The company is headquartered in Oak Brook, Illinois.
Read More on MCD:
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