Wedbush Morgan Initiates Coverage on McDonald’s (MCD) with an Outperform

July 17, 2009 11:38 AM EDT
Get Alerts MCD Hot Sheet
Price: $233.26 -3.46%

Rating Summary:
    29 Buy, 16 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 16 | Down: 12 | New: 22
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Wedbush Morgan initiates coverage on McDonald’s (NYSE: MCD) with an Outperform. Price target $63.

Wedbush analyst says, "MCD is the world's largest QSR by sales. Scale allows the company to advertise more, leverage G&A, and control costs better than its peers. More advertising, a larger R&D budget, and stronger cash flows per unit drive market share gains. We estimate MCD generates nearly 90% of its cash flows from franchise rents and royalties, making it one of the most economically defensive business models. We believe MCD's solid fundamental momentum and relatively low valuation will yield share price gains and relative outperformance."

"...Even as MCD approaches the full installation of the bridge operating platform, we believe it has a solid slate of initiatives to drive sales and margins over the next several years including 1) refranchising, 2) rollout of drive-thrus, 3) reimaging, and 4) expansion of breakfast / 24-hour. We see further upside if economies in Europe continue to be weak and MCD is able to take share by leveraging its value proposition."

To see more analyst ratings on MCD Click Here.

McDonald's Corporation, together with its subsidiaries, franchises and operates McDonald's restaurants in the food service industry worldwide.

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