McDonald’s Strategic Growth Initiatives and Resilience Justify Buy Rating Amid Market Challenges

DBS analyst Alison Fok reiterated a Buy rating on McDonald’s (MCD – Research Report) today and set a price target of $355.00.

Alison Fok has given his Buy rating due to a combination of factors that highlight McDonald’s strategic growth initiatives and resilience in challenging market conditions. Despite a slight decline in global comparable sales, McDonald’s commitment to expanding its core menu and aggressively growing its chicken business is expected to enhance its revenue base. The company is also focusing on increasing its active loyalty user base and boosting mobile orders, which are crucial for driving sales in its top markets.
Moreover, McDonald’s plans to expand its global footprint by increasing the number of its restaurants, aiming for a significant net unit growth over the next few years. This expansion, coupled with its position as the largest drive-thru player globally, positions the company well for future growth. Additionally, McDonald’s has demonstrated steady EBITDA growth over the past decade, and its strategies to offer value promotions are designed to counteract the current pressures on sales and margins. These factors contribute to a positive medium-term outlook, justifying the Buy recommendation with a target price of USD 355.

Fok covers the Consumer Cyclical sector, focusing on stocks such as Nike, McDonald’s, and ANTA Sports Products. According to TipRanks, Fok has an average return of 7.8% and a 67.80% success rate on recommended stocks.

In another report released on May 6, UBS also reiterated a Buy rating on the stock with a $350.00 price target.