Strength in US Dollar Could Weigh on McDonald's (MCD)

April 1, 2013 1:17 PM EDT
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Price: $122.85 +0.08%

Rating Summary:
    11 Buy, 22 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 20 | New: 54
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According to analysts at Deutsche Bank, currency trends could cost McDonald's (NYSE: MCD) 4 to 5 cent per share this year, given strength in the U.S. dollar relative to euro, pound, Australian, and Canadian currencies.

"These currencies have declined ~3-4% vs. the USD since MCD's 4Q earnings call on Jan 23. At that time, MCD guided to a 4-5c currency benefit in 2013. Given these moves, as well as a 7% decline in the Japanese yen over that time, we now believe currency is likely to be an ~4-5c drag this year, rather than a 4-5c benefit," said analyst Jason West.

"Each 1c move in the euro is roughly 1c to MCD EPS. So, a move in the euro to $1.20, along with further weakness in other key currencies, could cause another ~10-15c downside to our new forecast," added West.

Deutsche Bank has a Buy rating on McDonald's with a price target of $108.00

For an analyst ratings summary and ratings history on McDonald's (NYSE: MCD) click here. For more ratings news on McDonald's click here.

Shares of McDonald's closed at $99.69 yesterday.

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