Loss Of Investor Appetite Justified? McDonald's Analysts Dig Into Q4 Print: 'We Are Pleased'

Benzinga - by Priya Nigam, Benzinga Staff Writer.

Shares of McDonald's Corp (NYSE: MCD) slipped in premarket trading on Monday, after the company reported mixed results for the fourth quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

• Stephens analyst Joshua Long maintained an Overweight rating and price target of $320.
• TD Cowen analyst Andrew Charles reiterated an Outperform rating and price target of $325.

Stephens: McDonald's reported global same-store sales growth of 3.4%, short of the Wall Street estimates of 4.7%, with the shortfall being led by international sales, Long said in a note. “Same-store sales of +0.7% in the [international developmental licensed] IDL segment were below Street estimates of +4.7% driven by pressures from the war in the Middle East, he added.

While total revenues of $6.41 billion were slightly short of expectations, adjusted earnings beat the consensus estimates due to “$0.15 off one-timers associated to a software write-off and pre-tax charges associated with Accelerating the Organization,” the analyst wrote.

TD Cowen: McDonald's faced greater-than-expected challenges in the Middle East, a region that is estimated to contribute around 2% of the company’s global sales and about 1% of its global EBIT, Charles said.

“We are pleased with the 2024 margin outlook that slightly exceeds our est and consensus at the midpoint,” the analyst wrote. “Globally, the company expects to open ~2,100 restaurants in 2024 (500 company, 1,600 licensed) which are expected to contribute 2% to systemwide sales growth, ex FX,” he added.

MCD Price Action: Shares of McDonald's declined by 2.28% to $290.27 in premarket trading on Monday.

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