McDonald’s ( NYSE: MCD ) lost a bull in Deutsche Bank analyst Brian Mullan as he moved his rating to “Hold” after the company’s second quarter earnings report.
While McDonald’s ( MCD ) results for the second quarter were largely appreciated and Mullan indicated he believes the company is “navigating well” amid macroeconomic pressures, the upside for shares remains constrained. Indeed, while same store sales across markets seemed to meet expectations, Mullan raised concerns on margins as food inflation continues to hit the restaurant business.
“Company owned restaurant margins in the U.S. were below consensus, while IOM segment margins were slightly above; however, on the call management indicated that the current inflationary environment would likely keep this metric under some pressure in both segments for the balance of this calendar year,” he explained.
As such, he cut his rating on the stock to “Hold” from “Buy” and trimmed his price target from $263 to $259. Shares closed at a price of $257.09 on Tuesday.
Read more on Tuesday’s earnings results .
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McDonald’s downgraded at Deutsche Bank amid inflation concerns