How the Pros are Reacting to McDonald's Restructuring

Yesterday, McDonald's Corporation MCD announced a turnaround strategy that it hopes will arrest its diminishing relevance in the quick-serve restaurant space. Barclays and Credit Suisse reacted this morning with modest changes to their forecasts, noting that this is a long turnaround process.

Barclays said it remains bullish on McDonald's, but noted that "reversing trends at 36k global restaurants will take time." The analysts pointed out that though the company's numbers were bad in 2014, the company only declined 3 percent as it held the lowest valuation and highest dividend in the QSR industry.

Included in Barclays' top takeaways from the Turnaround Plan were the acceleration in refranchising and a return of cash. The analysts said that they are Overweight based on the thesis that McDonald's is a "strong multi-national company despite current weakness." In 2015, the analysts "expect performance to improve" as the company "sharpens its competitive focus domestically, and optimizes its businesses internationally."

Credit Suisse said it remains unconvinced, noting that McDonald's is a "show me" story. The Turnaround Plan "did not offer the game-changing news that bulls were hoping for." Credit Suisse argued that the plan "feels more like incremental steps in the right direction," instead of something that should have investors excited. Notably, the plan is "light on details" and doesn't mention capex or buybacks past 2015.

The Credit Suisse analysts raised their year-end price target by $1 to $100 to reflect higher 2016 and 2017 estimates, as well as a higher franchise mix over time.

Following the announcement yesterday, McDonald's declined 0.6 percent to $96.13. The stock is bouncing back slightly in early Tuesday trading at $96.42.