McDonald's (MCD) Holds Investor Event; UBS Raises Price Target to $125
UBS reiterated a Buy rating on McDonald's (NYSE: MCD), and raised the price target to $125.00 (from $122.00), following the company's investor event. While a permanent value plan was not provided, it appears a plan is coming and will include periods of national value focus as well as a regional approach. All day breakfast sales halo effect included incremental and margin accretive sales. Also, analyst Keith Siegner says that the product pipeline sounds like it could accelerate behind regional focus.
Siegner commented, "MCD managed to exceed high expectations across many strategic initiative fronts—this is real substantive change indicative of a new hungrier culture looking to innovate and drive value for all stakeholders. Ops momentum is building, driving core fundamentals in the right direction. For example, the sss gap to US burger/sandwich peers was positive even before breakfast all day, and sounds to have continued through October. Compounding this ops momentum is the strategic initiative program, which should create a higher margin/return, more stable, more efficient capital structure and therefore higher valuation multiple business. We are increasing our '16/'17 adj. EPS ests. to $5.50/$6.35 and believe upside still exists even from there."
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Shares of McDonald's closed at $113.22 yesterday.