2023-04-17 08:30:37 ET
Oppenheimer doubled down on McDonald's Corporation ( NYSE: MCD ) being a top pick in the consumer discretionary sector amid the turbulent economic backdrop. The bullish view on the restaurant stock ahead of the Q1 earnings report coincides with shares standing just a bit short of their all-time highs.
Analyst Brian Bittner and team noted the firm’s updated analysis highlights MCD as one of the rarities in its restaurant coverage where upside to consensus EPS marks for 2023 and 2024 was found. McDonald's ( MCD ) is said to have a resilient business model that is battle-tested and adds unique protection to financial forecasts if the macro unexpectedly deteriorates. In addition, management is believed to have executed some cost reductions and job cuts that may not be embedded yet in Street estimates.
"The investment story is also armed with emerging catalysts via an accelerating unit growth algorithm and leaner G&A strategy not properly reflected in consensus. Forward P/E of 24x doesn't represent a valuation discount, but MCD's strengthening fundamentals, faster growth and candidacy for positive earnings revisions keeps us attracted."
Oppenheimer lifted its price target on Outperform-rated McDonald's ( MCD ) to $315.
McDonald's ( MCD ) is expected to report Q1 earnings within the next few weeks. Read the recent breakdowns on McDonald's on Seeking Alpha.
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McDonald's is a favorite consumer discretionary stock play at Oppenheimer