Oppenheimer Remains On The Sidelines With McDonald’s Corporation (MCD) and General Electric Company (GE) Following Earnings

In the thick of earnings season, there is never a dull moment for investors. This week, Oppenheimer analysts weigh in on the recently released figures by fast food giant McDonald’s Corporation (NYSE:MCD) and industrial giant General Electric Company (NYSE:GE). At this point, the analysts feel more comfortable being on the sidelines.

McDonald’s Corporation

Oppenheimer analyst Brian Bittner reiterated a Perform rating on shares of McDonald’s, after the company reported stronger-than-expected quarterly gains in earnings thanks largely to serving items from its breakfast menu all day.

Bittner commented, “Comps in the U.S. exceeded high expectations, contributing to a $0.05 EPS beat. The launch of “All-Day Breakfast” in early-4Q represents the kick-starter for what investors hope is a prolonged turnaround. Sustained strength now relies on deeper strategies such as a national value platform, enhanced service/food-innovation and digital, in our view. Management appropriately in our view suggested future outperformance could be more moderate. We applaud recent results but we lack a vision for major EPS upside (which today’s results reinforced), which we require at this already re-rated valuation to move up from our Perform rating.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Bittner has a yearly average return of 17.4% and a 69.2% success rate. Bittner has a 8.2% average return when recommending MCD, and is ranked #2 out of 3593 analysts.

Out of the 20 analysts polled by TipRanks, 13 rate McDonald’s Corporation stock a Buy, while 7 rate the stock a Hold. With a return potential of  3%, the stock’s consensus target price stands at $122.65.

General Electric Company

In addition, Oppenheimer analyst Christopher Glynn reiterated a Perform rating on shares of General Electric, after the company reported mixed fourth-quarter and full-year 2015 results on Friday.

Glynn noted, “Top-line momentum was again solid, but the real key is how momentum sustains as the stock had already re-rated on well-known trend improvement in 4Q. For now, we are very modestly ticking up ’16E/’17E EPS estimates to account for better SSS and margin assumptions.”

“We maintain 2016E EPS at $1.50, with slight bias above midpoint of $1.45-1.55 guidance range. Erratic quarterly distribution includes roughly $0.12 net restructuring in 1H (2Q weighted) and $0.12 net gains in 2H (~$0.17 net gain in our 3QE). Our 2017-’18E EPS are unchanged,” the analyst added.

According to TipRanks.com, analyst Christopher Glynn has a yearly average return of 12.5% and a 67% success rate. Glynn has a 16.3% average return when recommending GE, and is ranked #5 out of 3593 analysts.

Out of the 13 analysts polled by TipRanks, 10 rate General Electric stock a Buy, while 3 rate the stock a Hold. With a return potential of 19%, the stock’s consensus target price stands at $33.33.


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