This Analyst Wasn't Surprised By McDonald's Disappointing Quarter

In a report published Thursday, Barclays analysts maintained an Overweight rating on

, with a price target of $105, after the company posted disappointing quarterly results. "MCD global fundamental performance continues to disappoint across the top & bottom line," the analysts said. McDonald's reported its adj. EPS at $1.01, representing a 10 percent y/y decline and missing the estimate and consensus. March comp came in at -3.3 percent, below expectation of -2.2 percent. The comps fell short "in each region." Worldwide restaurant margin stood at 14.3 percent, marking a y/y decline of 180bps. In the report Barclays noted, "In terms of performance by region, the US, France, Russia & Japan remain the most challenged, Germany & China are seeing signs of improvement, and Australia, the UK & Canada continue to trend positive. But global comp & FX pressures remain large… April global comps are expected to be "negative", and the FX headwind will reduce EPS by $0.40-0.45, up $0.05 from prior, now representing 8-9pp of growth." The company is expected to provide details of its turnaround plan in May. The analysts expect these details to include "value enhancing initiatives in both short term (i.e., return of capital to holders via refranchising, leverage, cost saves) & the long term (i.e., fundamental stabilization and ultimate re-acceleration)." The company's share price already reflects the near-term challenges, the report stated.