McDonald's (MCD) PT, Estimates Lowered at Credit Suisse Amid Brexit
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Credit Suisse analyst J. West lowered estimates and his price target on McDonald's (NYSE: MCD) to $130.00 (from $135.00) amid Brexit but maintained an Outperform rating.
West commented, "Lowering ests. on MCD to reflect our recent US franchisee checks and potential fallout from the Brexit decision (incl. USD strength). 2Q US same-store sales (SSS) est. moves to +2.3% from +3.5%. (Consensus = +3.7%, per Cons. Metrix). 2Q global SSS est. moves to +3.2% from +3.7%. We've also trimmed our 2H16 global SSS by ~50bps, moving to +2%, to reflect potential macro headwinds in the US & Europe. Our 2016E f/x drag moves to -10c from -5c on recent USD strength. Our 2Q16/2016/2017 EPS moves to $1.40/$5.52/$6.23 from $1.41/$5.57/$6.32. Maintain Outperform as MCD tends to hold up better than most in a choppy environment given the defensive nature of its business (low avg. check, low op leverage due to royalty + real estate revs.). Trimming PT to $130 from $135, based on 22x NTM P/E, roughly in line with franchised peers and supported by ~3% div. yield."
Shares of McDonald's closed at $119.44 yesterday.
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