Judge Rejects Former McDonald’s CEO’s Bid To Dismiss Lawsuit – Report
Former McDonald’s CEO Steve Easterbrook failed in his attempt to get a lawsuit against him dismissed, which according to Reuters, alleges that he intentionally covered up his improper sexual conduct with employees.
McDonald’s (MCD) is suing Easterbrook, hoping to recoup an estimated $41.8 million that was paid to him as part of his severance package.
Reuters reports that the fast food chain knew about one, non-physical consensual relationship with an employee when it approved Easterbrook’s severance package, but later discovered through an anonymous tip that he had deleted dozens of sexually explicit photos of women, including three employees.
Easterbrook argued that McDonald’s should have known about his other relationships with employees as the restaurant company had evidence on its computer systems, but Vice Chancellor Joseph Slights dismissed this notion saying, “This active concealment makes it at least reasonably conceivable the company had no way of knowing the full extent of Easterbrook’s misconduct,” according to Reuters. (See McDonald’s stock analysis on TipRanks)
Citigroup analyst Sergio Matsumoto reiterated his Buy recommendation on MCD two days ago and maintained his price target at $230. This implies upside potential of around 10% from current levels.
Matsumoto opened a “positive Catalyst Watch,” referring to McDonald’s chicken sandwich launch. He feels that the company’s high store density of 41 units per 1 million people creates a competitive advantage for McDonald’s as lockdowns and mobility restrictions continue amid the COVID pandemic.
McDonald’s receives a Strong Buy consensus rating based on 18 Buys and 5 Holds. The average analyst price target of $239.86 suggests upside potential of around 14% over the next 12 months.
McDonald’s gets an 8 out of 10 on TipRanks’ Smart Score, which implies that the stock is expected to outperform analysts’ expectations.
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