How Analysts View McDonald’s After Earnings

By Chris Lange Updated Jan 13, 10:21AM EST · Published Apr 25, 10:25AM EDT

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How Analysts View McDonald’s After Earnings — © courtesy of McDonald's Corp.

McDonald’s Corp. (NYSE: MCD) is just below its all-time highs after reporting its first-quarter earnings on Friday. As a result of these solid earnings, analysts have poured into the stock, most taking a very positive view. 24/7 Wall St. has included some of the highlights from the earnings report as well as what some analysts are saying about the golden arches.

The fast-food giant said it had $1.23 in earnings per share (EPS) on $5.90 billion in revenue. Thomson Reuters consensus estimates had called for $1.16 in EPS on revenue of $5.82 billion. In the same period of last year, the company posted EPS of $1.01 and $5.96 billion in revenue.

Global comparable sales increased 6.2% in the quarter, as well as consolidated revenues decreasing 1%, but increasing 3% in constant currencies.

In the United States, first-quarter comparable sales increased 5.4%, fueled by the ongoing popularity of All Day Breakfast and the introduction of McPick 2 branded national value platform.

In the High Growth segment, first-quarter comparable sales increased 3.6%, led by strong comparable sales performance in China and positive performance across various other markets, including Russia.
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In terms of its segments, the company reported $3.75 billion in sales by company-operated restaurants, while revenues from franchised restaurants totaled $2.15 billion.

A few analysts weighed in on McDonald’s after the company reported its earnings:

BTIG Research reiterated a Buy rating with a $137 price target.
Cowen has a Market Perform rating and raised its price target to $127 from $125.
Deutsche Bank reiterated a Buy rating with a $140 price target.
Jefferies has a Neutral rating with a $115 price target.
Nomura has a Buy rating and raised its price target to $142 from $138.
RBC Capital has an Outperform rating and raised its price target from $135 to $140.

So far in 2016, McDonald’s has outperformed the broad markets, with the stock up 7%. Over the past 52 weeks, the stock is up 33%, and it is the best Dow performer in this time frame.

Shares of McDonald’s were last trading up 0.4% at $126.04 Monday morning, with a consensus analyst price target of $129.59 and a 52-week trading range of $87.50 to $129.80.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.