Piper Jaffray analyst, Nicole Regan, attended McDonald's (NYSE: MCD) analyst day and believes that current initiatives are on track to increase cash flow which will drive share buybacks over time. She projects a +1.6% global 4Q15 comp, composed of flat in the U.S., +3.0% at Intl Lead markets, +3.0% at High Growth markets and +2.0% in Foundational regions. Each 1% comp change = approximately $0.04/share when occuring at either the U.S. or Intl Lead market level.

Management now guides for a 4,000 refranchised store target by year end 2018, with a new 95% long-term goal. By her calculation, G&A moves towards the 2%+ range of systemwide sales level as compared to its current 3% (projected FY15 end) level with each 100 bps = ~$0.05 per share. We believe the multiple assigned to MCD shares may benefit over time from a mix toward increased franchise ownership, unit growth and/or from the potential for increased leverage.

Current strategies, in turn, lead to strong cash flow to allow for self-funded growth/investments and/or capital deployment to shareholders. Her updated model also now reflects additional leverage, or an approximately $10 billion of incremental funded debt, with which she believes will be used to purchase additional shares (ie lowered share count) in the 4Q16 period.

No change to Overweight rating and $130 PT

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 $113.22 yesterday.