Deutsche Bank Maintains Buy on McDonald's

Deutsche Bank is out with its report today on McDonald's MCD, maintaining Buy. In a note to clients, Deutsche Bank writes, "Several long-term SSS drivers: MCD noted that Chinese consumers turned more cautious in late 2010, as wallets were pressured by inflation in other areas, such as groceries. MCD's China comps slowed to 5.2% in 4Q10 from 12.7% in 3Q10. 1Q11 was a respectable 6.5%, though we are still not sure why MCD's China comps trailed so far behind YUM in 1Q (+13%). However, we did come away positive on MCD's long-term comp drivers in China, such as breakfast (7% of sales vs. over 20% in other developed markets in Asia), delivery, reimaging, beverages (180 McCafe units), pricing, and drive-thru expansion. We believe both MCD and YUM are in a position to profitably grow in China for many yrs to come. Lastly, MCD's margins in China have been 'stable' so far this year, as pricing+traffic growth has offset inflation. Maintain Buy on MCD." Deutsche Bank maintains an $89 PT on MCD. At the time of posting, shares of MCD were trading pre-market at $81.50, down 1.01% from Friday's close.