McDonald's Is Well Positioned Irrespective Of The Consumer Backdrop, Says Analyst

Credit Suisse analyst Lauren Silberman reiterated an Outperform rating on the shares of McDonald’s Corp MCD and raised the price target from $292 to $298.
The analyst believes MCD strength continued in 4Q22 & overall sentiment remains positive broadly.
Consensus models U.S. same-store sales (SSS) of 8.1%, which likely embeds low double-digit SSS in October & normalized SSS through the rest of 4Q, said the analyst.
Consensus models 4Q EPS of $2.45, up 10% YOY, and EPS growth of 6.5% in 2023 and 9.5% in 2024, added the analyst.
The analyst believes there could be an upside to 2023/2024 estimates from cost savings from the recently announced organizational restructuring as well as FX.
Looking ahead into 2023, we like MCD’s defensive business model, believe MCD is well positioned to execute irrespective of the consumer backdrop, and believe MCD’s value leadership & operational strength should support relative resilience globally.
The analyst believes MCD maintained momentum in 4Q, supported by a contribution from marketing, digital initiatives, and select menu innovation.
The launch of the adult Happy Meal & return of Halloween Pails drove low double-digit SSS in October & record digital transactions.
MCD generated 7.7 million digital app downloads in 4Q, the highest in the history of our data set, up nearly 50% YOY, and 2022 app download growth was up nearly 40%, outperforming all burger peers, added the analyst.
Price Action: MCD shares are trading higher by 0.41% at $271.55 on the last check Wednesday.

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