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Shares of fast-food restaurant giant McDonald’s (NYSE:MCD) were upgraded to Overweight from Neutral by Atlantic Equities analyst Edward Lewis on Wednesday, raising the firm’s price target on the stock to $278.
The analyst told investors that as the global consumer softens, companies who operate resilient business models and also have a wealth of experience managing through such challenging periods come to the fore.
“McDonald’s is such a name with a dominant position in the global QSR category, which has remained resilient during periods of consumer softness, and decades of experience at managing through such periods across what is now a stable of >40k units,” wrote Lewis. “Adding to the company’s appeal are the positive changes it has been undertaking as it becomes largely a franchise business, accelerated by the Russia exit, and as digital, with all its positive tailwinds around ticket, loyalty and marketing, plays an ever more important part.”
Lewis added that McDonald’s is more than just a defensive play, it is a value play as well, while digital is key to sustaining comp growth.
“We see digital as a positive driver across all aspects of the business: in marketing, it has helped drive strong engagement with the celebrity menus initiative; in ordering, whether drive-thru or delivery, it has seen increased group-buying, supporting ticket’s resilience.”
