Bank Of America Says 'Change Is In The Air' At McDonald's, Stock Now Worth $112

In a report published Monday evening, Bank Of America analyst Joseph Buckley argued that investor interest in

has increased following the appointment of its new CEO Steve Easterbrook. Easterbrook views himself as an "internal activist" and while Buckley noted it is unclear what he means by that self-description, it has proven to be "promising enough to have awakened McDonald's shares over the past week." "The primary focus by the new CEO will undoubtedly be on improving sales, especially in the U.S. where the brand is ceding significant market share to competitors," Buckley wrote. "McDonald's has a number of competitive advantages that it should be able to use more effectively. These include outstanding real estate, great operational consistency, and a marketing fund that is several times as large as any competitor." Expanding on the real estate advantage, Buckley stated that McDonald's real estate is expected to retain its "historical sacrosanct status" as it is an integral part of the business that generates "substantial" rental revenues for the company. Buckley concluded that he expects "flattish to modestly negative" U.S. and Europe same-store sales in McDonald's February sales report which will be released on March 9. The analyst also wrote that he expects Japan's same-store sales to be down "significantly" but sales in China should have benefited from the Chinese New Year calendar shift into February. Shares were reaffirmed with a Buy rating with a price target raised to $112 from a previous $101.