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.