McDonald's seen getting a Q4 boost from same store sales, analysts say
By Liz Moyer
Investing.com -- McDonald’s Corporation (NYSE: MCD ) is entering 2023 on a strong note, with a renewed emphasis on its core products and building its capabilities in digital services, drive-thru and delivery, something that makes it a top pick in the restaurant category, according to Oppenheimer analysts.
The research firm is forecasting a healthy same store sales number when the fast food giant reports earnings next week. It is also forecasting a better-than-expected earnings per share number for the quarter, estimating $2.54 a share, which is above the average Wall Street estimate of $2.45.
“The company’s unmatched scale and operational resilience has created strong global momentum, particularly in U.S., where traffic is positive,” the analysts wrote in a note. “We believe MCD is positioned to win regardless of the economic situation.”
They noted that in the 2008-2009 recession, Mcdonald's was the only public restaurant company to show positive earnings revisions throughout the downturn.
Shares of Mcdonald's rose 0.5% on Wednesday and are up 2.7% for this year and 8% over the past 12 months. Oppenheimer rates the stock an outperform with a price target of $304, implying a 12% upside from current trading levels.
McDonald’s latest strategy, which it is calling “Accelerating the Arches 2.0” puts a focus on marketing, core products and an emphasis on delivery, digital, drive-thru and development, including ways to improve its classic menu selections such as the Big Mac and the Chicken McNugget.
The strategy “represents an under-appreciated catalyst to elevate unit growth and enhance operating margins,” Oppenheimer wrote in a note on Wednesday.
For the fourth quarter, Oppenheimer forecasts an 8.5% jump in same store sales, versus the Street consensus of 8.1%.
The firm is also modeling earnings for 2023 in excess of the Street consensus, at $10.73 a share versus the average analyst estimate of $10.59 a share.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or