Core Viewpoint - McDonald's stock is currently viewed as an opportunity below 260,withchallengesinthefastfoodindustryduetorisingcommoditypricesandchangingconsumerbehavior[1][2][4]IndustryOverview−Commoditypricesforkeyingredientshavesurgedsincethepandemic,leadingtoincreasedcostsforrestaurantcompanies,whichinturnhaveraisedmenuprices[2][4]−Theconsumerpriceindexforfoodawayfromhomehasrisensharply,divergingfromthemorestablepricesforfoodathome[2][3]CompanyPerformance−McDonald′shasseena1005 value meal across more than 90% of its restaurants to drive traffic, although this may negatively impact profit margins [8] - Recent earnings revisions have been predominantly downward, with 25 downward revisions and only one upward revision in the last three months [9] Future Outlook - Revenue is expected to increase by 2% to $6.63 billion, but EPS estimates show a 3.2% decrease year-over-year [9] - The company is likely to lower its guidance for the remainder of the year, increasing the risk of a post-earnings sell-off [9] - Long-term prospects remain positive, with expectations of low-double-digit returns driven by EPS growth, dividends, and buybacks, but short-term volatility is anticipated [9]
McDonald's(MCD) Seeking Alpha·2024-07-23 16:13