Citi: McDonald's Initially Underwhelms with SSS in February

In a research report published earlier today by Citi, McDonald's Corp.'s MCD trends in Europe and APMEA were sluggish in comparison to the U.S. Citi commented in the report, “MCD Europe reported Feb SSS of +4% vs. +4% in Jan and the FC est. of +6.8%. Notably, weather may have had a neg impact of roughly 200 bps to results during the month, but even more importantly, we sense recently enacted austerity measures (particularly in France) may be having an adverse impact on results as well. While MCD proved to be fairly resilient in Europe during '11 despite macro turbulence and austerity measures, we believe these factors could begin to pose more of a risk to MCD Europe in ‘12. While one month does not make a trend, we believe investors will likely focus intently on Europe when MCD reports 1Q results in April.” Citi maintains its Neutral rating and $102 PT on McDonald's, which is currently trading at $96.91.