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UBS Reiterates Buy on McDonald's (MCD) Following 2Q

July 27, 2016 9:37 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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UBS reiterated a Buy rating and $138.00 price target on McDonald's (NYSE: MCD) following the company's 2Q earnings report. Disappointing U.S. sss highlight the challenge of maintaining momentum against industry headwinds. However, MCD continues to outperform peers and a positive 130 bps sss gap to the QSR sandwich group was largely in line w/ 1Q's +140 bps.

Analyst Dennis Geiger commented, "Despite decelerating global momentum, sales and profitability efforts are working and should support turnaround progress as key markets transition to a sustainable growth phase. NT, w/ U.S. sss softness likely to persist as industry trends remain challenged, & shares trading at 13.7x EBITDA, upside could be limited. We're trimming EPS estimates largely behind reduced sss expectations, global macro volatility, and FX. However, we view downside as limited given MCD's defensive status and as fundamentals position the brand for further share gains. Traffic driving initiatives could help reaccelerate sales and corp. strategic initiatives remain intact, w/ benefits & upside possible over time."

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 $121.71 yesterday.



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