CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We cut our 12-month target to $310 from $335, 25.2x our 2024 EPS, slightly below MCD’s five-year average forward P/E of 25.6x. We lower our 2024 EPS estimate to $12.30 from $12.51 and initiate 2025’s at $13.53. MCD posted Q4 adj-EPS of $2.95, $0.12 above consensus. Revenue of $6,406M (+8.1% Y/Y) was $47M below consensus. Adj-operating income grew 13.8% Y/Y to $2,940M vs. the $2,916M consensus, with margin at 45.9%. Same-store sales rose 3.4% vs. 4.6%, mainly due to higher pricing (high-single-digit range), as MCD faced a negative impact from war in the Middle East and a spending pullback by lower income consumers, as eating at home has recently become more affordable. We also note higher price competition and weak consumer sentiment in China, as MCD increased its ownership stake in the region to 48% from 20%. While we’re positive on MCD’s focus on absolute affordability and market share gains in 2024, recent headwinds show few signs of abating soon as MCD has less room to pull on its price and cost levers.