J.P. Morgan Believes McDonald's Stock to Take a Breather Post-Strong Performance

In a recent research report published by J.P. Morgan, McDonald's MCD had a fantastic 4Q with a solid EPS. J.P. Morgan commented in the report, “Favorable weather contributed to an even stronger underlying global comp month at 9.6% vs. our ~6.5% estimate and commentary that January global comps are expected up 5.5-6.5% bodes very well for visibility to our revised 1H12 global estimate of 4.5%. The US contributed $0.02 of upside, APMEA $0.01, while Europe was in-line and Other Countries & Corporate subtracted $0.01. A lower tax rate added another penny. We maintain our $5.63 F12 estimate, which includes higher interest expense (in-line with 6-8% y/y growth guidance), a $0.17 negative impact from currency, in-line with guidance that bracketed our revised currency estimate in our Jan-23 earnings preview, and 6% higher G&A due to the Olympics and technology investments.” J.P. Morgan reiterates its Overweight rating and $105 PT on McDonald's, which closed yesterday at $98.75.