Tags: McDonalds | Shares | Stock | Burgers | Menu

BMO: McDonald's Shares Should Jump 15 Percent on Improved Menu

BMO: McDonald's Shares Should Jump 15 Percent on Improved Menu
(Getty Images/Paul J Richards)

By    |   Wednesday, 26 April 2017 11:24 AM

McDonald's Corp. shares should jump 15 percent in the next year on new burgers and better food menu, an analyst told CNBC.

Investors should buy McDonald's stock now before new menu improvements will drive earnings above expectations next year, according to BMO Capital Markets, which initiated on the restaurant chain with an outperform rating, CNBC reported.

"We believe MCD has a well-developed pipeline of menu news to continue to support customer engagement with the brand, including more focused value efforts, renovations around core menu items, and new product innovation," analyst Andrew Strelzik wrote in a note to clients.

McDonald's on Tuesday reported a better-than-expected rise in quarterly profit and U.S. same-restaurant sales on lower costs, all-day breakfast, $1 drinks and promotions on its popular Big Macs, signaling the company's plan to keep customers coming back to its restaurants has gained traction.

McDonald's shares on Tuesday popped to an all-time high, jumping 5.3 percent to $141.31, after profit topped Wall Street's estimate by 14 cents per share.

Two years into a turnaround under Chief Executive Steve Easterbrook, the company has slashed overhead, weeded out underperforming restaurants, introduced all-day breakfast and switched U.S. restaurants to chicken raised without human antibiotics. The moves re-charged the 60-year old chain that was losing business to rivals such as Wendy's and Burger King, Reuters reported.

"There was a lot of low hanging fruit ... (that) set the table for him to rapidly come in and make a lot of changes," said Trip Miller, managing partner at Gullane Capital Partners, which holds 20,000 McDonald's shares.

(Newsmax wires services contributed to this report).

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McDonald's shares should jump 15 percent in the next year on new burgers and better food menu, an analyst told CNBC.
McDonalds, Shares, Stock, Burgers, Menu
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2017-24-26
Wednesday, 26 April 2017 11:24 AM
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