Lower Expectations For McDonald's, Yum Brands Heading Into 2017

Nomura’s Mark Kalinowski maintains Buy ratings on McDonald's Corporation MCD and Yum! Brands, Inc. YUM, while reducing their price targets and estimates.

McDonald's

The price target has been reduced from $139 to $137. The EPS estimates for McDonald's for 2016 and 2017 have been reduced by $0.03 to $5.73 and by $0.08 to $6.23, respectively, based purely on currency headwinds, Kalinowski said.

The EPS estimate for 2018 has been reduced by $0.08 to $6.83 to reflect the “lower anticipated base of earnings coming off 2017E,” Kalinowski wrote.

Yum Brands

The price target has been reduced from $70 to $69. The EPS estimates for Yum Brands for 2016 and 2017 have been reduced from $3.56 to $5.54 and from $2.80 to $2.76, respectively, based solely on currency headwinds.

The EPS estimate for 2018 has been reduced by $0.04 to $3.16 to reflect the “lower anticipated base of earnings coming off 2017E,” the analyst mentioned.