UBS Raises Price Target on McDonald's (MCD) as Strong US Results Push Turnaround Plan

UBS reiterated a Buy rating on McDonald's (NYSE: MCD), and raised the price target to $131.00 (from $125.00). The strength of 4Q's US results come as the turnaround plan is still in the early stages. With investor fears mounting regarding whether MCD can 'comp the comp' in 2H16, beyond continuous value throughout the menu (paramount) and all-day breakfast, several other factors can drive sales.

Analyst Keith Siegner commented, "Strong results in the US, Lead & High Growth markets entering 2016 positions MCD well for further outperformance this year and beyond. In the US, more market share gains are possible over the NT and LT behind continued execution against existing and new initiatives, as quality perceptions improve & value leadership is exploited. Given many drivers, we view elevated US and global sss results as sustainable, and both upward estimate revisions and incremental strategic initiative announcements possible. Our EPS estimates decrease slightly entirely on higher G&A post 4Q, more than offsetting improved sss and margins. However, we maintain our BUY rating as numbers can move up from here and the current ~13.5x EBITDA multiple has flexibility to shift higher as MCD evolves to be ~95% franchised."

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 $117.18 yesterday.

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