CFRA Maintains Hold Opinion On Shares Of Mcdonald’s Corporation

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our 12-month target to $287 from $310, 23.4x our 2024 EPS, below MCD’s five-year average forward P/E of 25.6x, reflecting weaker customer traffic trends. We cut our 2024 EPS to $12.26 from $12.30 and 2025’s to $13.41 from $13.53. MCD posted Q1 adj-EPS of $2.70, $0.03 below consensus. Revenue of $6,169M (+ 4.6% Y/Y) was in line with consensus. Adj. operating income rose 2.1% Y/Y to $2,771M vs. $2,825 consensus, with margin contracting 110 bps to 44.9%. Same-store sales rose by 1.9% vs. 2.4% consensus, driven by growth in the U.S. (+2.5%) and Int’l Operated Markets (+2.7%), partly offset by Int’l Developmental Licensed Markets (-0.2%), largely due to the war in the Middle East. Despite a tough macro backdrop, where most consumers seek superior value, MCD continued to drive digital penetration, highlighted by a record high in mobile app orders. Yet, we still think upside in MCD’s valuation remains limited, given the lack of levers at its disposal to drive both top- and bottom-line growth in 2024.

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