McDonald's: E. Coli Continues To Infect Results; Analysts Expect Value Offerings, Marketing To Drive Performance

Core Viewpoint - McDonald's reported a decline in fourth-quarter revenues but shares edged higher due to better-than-expected results amid a challenging industry environment [1][2]. Financial Performance - McDonald's fourth-quarter earnings were $2.83 per share, slightly missing the consensus estimate of$2.85 per share [3]. - The company experienced lower margins and unfavorable operating expenses, which offset stronger franchise margins and international sales growth [3]. Sales Trends - US same-store sales improved sequentially in January, although global industry trends remained sluggish [4]. - International same-store sales growth was better than expected, while the US market continued to pressure revenues and margins [5]. - Same-store sales trends are expected to remain volatile in the first quarter due to weather conditions and industry softness [6]. Future Outlook - Management plans to enhance international value programs in the first quarter to improve competitive positioning [4]. - The company expects to open approximately 2,200 restaurants globally in 2025, contributing slightly over 2% to systemwide sales growth, excluding foreign exchange effects [7]. - With easier year-on-year comparisons starting in the second quarter, same-store sales growth is anticipated [9]. Analyst Ratings - Morgan Stanley raised its price target from $336 to$340 while maintaining an Overweight rating [11]. - BMO Capital Markets lifted its price target from $335 to$340, maintaining an Outperform rating [11]. - KeyBanc Capital Markets raised its price target from $320 to$335, reaffirming an Overweight rating [11]. - TD Cowen maintained a Hold rating with a price target of $300 [11]. - Wedbush reiterated an Outperform rating with a price target of$330 [11].