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McDonald's (MCD) Show Me the SSS - Wells Fargo

July 20, 2016 8:24 AM EDT
Get Alerts MCD Hot Sheet
Price: $281.95 -0.02%

Rating Summary:
    28 Buy, 18 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Wells Fargo analyst, Jeff Farmer, reiterated his Market Perform rating on shares of McDonald's (NYSE: MCD). MCD is scheduled to report Q2 earnings on 7/26 (BMO). The analyst is looking for EPS of $1.41 (+12% yr/yr), above the Street at $1.39.

The analyst expects investors to focus on:

1) U.S. SSS with segment momentum slowing in April/May and MCD’s outperformance versus the peer group falling to 140 bps in Q1 from 290 bps in Q4

2) Global SSS with Japan recovery tailwind diminished (Q2 SSS +19.7% vs. Q1 +26.9%) and the International Lead Market segment facing increasingly challenging comparisons

3) refranchising updates.

Barring any significant progress with the company’s multi-year refranchising effort and clarity on the potential financial impact (margins, ROIC use of proceeds), the analyst believes multiple expansion will prove difficult in the backdrop of decelerating segment SSS.

2016E EPS moves to $5.62 from $5.64 to reflect the depreciation of the British Pound.

For an analyst ratings summary and ratings history on McDonald's click here. For more ratings news on McDonald's click here.

Shares of McDonald's closed at $126.50 yesterday.



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