Deutsche Bank Comments On McDonald's 3Q EPS Beat

Deutsche Bank has published a research report on McDonald's MCD after the company reported a 3Q EPS beat. In the report, Deutsche Bank writes, "MCD posted 3Q EPS of $1.45 (+12% y/y), which was above our est. of $1.41 and Consensus Metrix of $1.42. Revenue of $7.166bn was ~2% ahead of our forecast and consensus, primarily due to stronger Sept comps (+6.6% globally vs. DBe +5.3% and consensus +4.2%). Restaurant margin of 20.0%, down 100bps, was about 30bps worse than our model on higher food costs. This was offset by slightly better franchise margin (83.7% vs. DBe 83.5%) and higher Other Income ($68.8mm vs. DBe $30mm). Total EBIT was $2.395bn vs. DBe $2.334bn, with EBIT margin at 33.4% vs. DBe 33.3%. Interest expense and non-operating income were about in line with our model, as was the tax rate (33.4% vs. DBe 33.5%). Forex helped by $0.08 vs. our est. of $0.09." Deutsche Bank maintains its Buy rating and $100 price target on McDonald's., which closed yesterday at $89.01.