Market Overview

CLSA On McDonald's: Expect Limited Growth In China Over Next 3 Years

CLSA On McDonald's: Expect Limited Growth In China Over Next 3 Years

CLSA's Jeremy Scott reiterated McDonald's Corporation (NYSE: MCD)'s Underperform rating and $128 price target.

Scott was highly concerned with growth in China as the nation's economy deaccelerated. "The recent comp in McDonald's is likely to be muted going forward," said Scott. The June China Reality Research (CRR) study "measured ongoing deceleration in consumption of foreign fast food and a drop in favorability for McDonald's in both high-tier and low-tier cities" stated the analyst. Scot believed pullbacks on McDonald's expansionary campaigns in China and refranchising will result in "limited growth over the next three years."

‘Crowded and Tired'

McDonald's competition has also suffered recently.

"In higher-tier cities, where there has been a decade-long blitz of foreign fast-food chains playing catch-up with KFC (NYSE: YUM), led in part by McDonald's, consumers are showing signs of category fatigue," said Scott. Although McDonald's has "fared better" than competition, the analyst thought an "overworked and overextended market will pressure comps in the near term."

McDonald's closed at $121.90.

Latest Ratings for MCD

Nov 2019UpgradesNeutralBuy
Nov 2019MaintainsBuy
Nov 2019MaintainsNeutral

View More Analyst Ratings for MCD
View the Latest Analyst Ratings

Posted-In: CLSA Jeremy ScottAnalyst Color Reiteration Restaurants Analyst Ratings General


Related Articles (MCD + YUM)

View Comments and Join the Discussion!

Latest Ratings

MJP MorganMaintains13.0
IPARDA DavidsonMaintains76.0
TGTMorgan StanleyMaintains130.0
VCMorgan StanleyMaintains52.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

William Blair Waiting For Better Risk/Reward In SiteOne

Bernstein Checks Indicate Weak Start For Macau Gaming In June