McDonald’s in good shape regardless of consumer background, say analysts

  • credit Suisse Analyst Lauren Silberman reiterates Outperform rating on shares of McDonald’s Corporation Delhi Municipal Corporation And raised the price target from $292 to $298.
  • Analyst believe MCD’s strength continued in 4Q22 and the overall sentiment remains broadly positive.
  • The analyst said the consensus model is US same-store sales (SSS) at 8.1%, which likely embeds low double-digit SSS in October and normalized SSS through the rest of 4Q.
  • The analyst said the consensus model calls for 4Q EPS of $2.45, up 10% YOY, and EPS growth of 6.5% in 2023 and 9.5% in 2024.
  • The analyst believes the recently announced organizational restructuring as well as cost savings from FX could lead to a jump in 2023/2024 estimates.
  • Looking ahead into 2023, we like MCD’s defensive business model, believe MCD is well-positioned to execute regardless of the consumer backdrop, and believe MCD’s price leadership and operating strength will be leveraged globally. Should support relative flexibility.
  • The analyst believes MCD maintained momentum in 4Q, fueled by contributions from marketing, digital initiatives and select menu innovation.
  • The launch of Adult Happy Meals and the return of Halloween Pail drove low double-digit SSS in October and record digital transactions.
  • MCD recorded 7.7 million digital app downloads in 4Q, the most in the history of our data set, up nearly 50% YOY, and 2022 app download growth of nearly 40%, outpacing all burger peers, the analyst said.
  • price action: Shares of MCD are trading up 0.41% at $271.55 at last check Wednesday.

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