Market Overview

Stephens: McDonald's Is Making The Necessary Changes To Win

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Will Slabaugh of Stephens on Thursday commented in a note that McDonald's Corporation (NYSE: MCD) is willing to make the necessary changes, as evidenced by the decision to allow its CEO Don Thompson to step down.

“While it is difficult to determine immediate implications, we believe this is a clear sign that McDonald's is willing to make the changes necessary to win,” Slabaugh wrote. “We also believe that this opens the conversation to multiple value-creating initiates that the previous management team was seemingly unwilling to entertain, including improving menu innovation at the lower end, refranchising a majority of company-owned stores, and adding debt to an under levered balance sheet to return cash to shareholders.”

Related Link: Brian Sozzi Knows Why McDonald's Showed Its Embattled CEO The Door

Slabaugh notes that McDonald's is in a position to improve fundamental performance and support a higher stock price. As such, shares present an attractive risk to reward profile at current levels.

Shares are Overweight rated with a $105 price target.

Latest Ratings for MCD

DateFirmActionFromTo
Jan 2021OppenheimerUpgradesPerformOutperform
Jan 2021Stephens & Co.MaintainsEqual-Weight
Jan 2021WedbushInitiates Coverage OnOutperform

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Posted-In: Don Thimpson Fast Food McDonald's Stephens Will SlabaughAnalyst Color Management Analyst Ratings

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