McDonald's (MCD): Investors Facing Tough Comps Ahead Of Refranchising Catalyst - Wells Fargo
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Wells Fargo analyst, Jeff Farmer, reiterated his Market Perform rating on shares of McDonald's (NYSE: MCD) ahead of earnings. The analyst believes U.S. same-store sales (SSS) remain front and center for investors as the segment laps its most difficult sales comparisons since 2012 while competitors continue the promotional barrage and capital returns begin to slow.
MCD is scheduled to report 3Q16 earnings on 10/21 (BMO). The analyst is looking for EPS of $1.46 (+4% yr/yr), below the Street at $1.48.
Key points to focus on:
1) U.S. SSS in the 3Q (WFC est +1.2% vs. the Street’s 1.3%)
2) updates on refranchising efforts in Asia along and cost savings
3) any commentary on industry promotional intensity, particularly with the gap between food-at-home and food-away-from-home inflation being at its widest gap since the 1980s (ex-recessions).
Shares of McDonald's closed at $114.09 yesterday.
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