McDonald’s PT Gets A Lift From JPMorgan

McDonald’s (MCD) stock got a string of price target increases after it reported sequential improvement in 2Q comparable store sales on Tuesday.

While global comparable sales declined by 23.9% in the quarter, they improved in every month of the second quarter. Further, McDonald’s CFO Kevin Ozan stated that the company expects U.S. comparable sales to be slightly positive in July.

Among the top Wall Street analysts, JPMorgan analyst John Ivankoe raised his price target to $205 (4.5% upside potential) from $204, while Cowen & Co. analyst Andrew Charles lifted the PT to $220 (12.1% upside potential) from $210.

Stifel Nicolaus analyst Christopher O’Cull also raised the price target on McDonald’s to $195 from $182, while reiterating a Hold rating. O’Cull noted that higher-than-expected operating expenses weighed on 2Q earnings. The analyst was encouraged that the U.S. restaurant margin came out higher than projected.

O’Cull remains optimistic about McDonald’s comparable-store sales in the second half of the year as “the system invests unspent Q2 marketing funds and deploys incremental marketing investments contributed by the franchisor.”

Currently, the Street has an optimistic outlook on the MCD stock. The Strong Buy analyst consensus is based on 20 Buys and 4 Holds. The average price target of $209.20 implies an upside potential of 6.6%. (See MCD stock analysis on TipRanks).

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