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UBS is loving it.
The firm said McDonald’s Corporation (NYSE:MCD) is well-positioned for further shares gains on global sales momentum, core competitive advantages and earnings upside.
The burger maker reports second-quarter earnings on July 27. Shares are up 0.6% on Thursday morning while the S&P 500 is down 0.4% and the Nasdaq is lower by 0.74%.
UBS said it expects same-store-sales upside both in the U.S. and abroad as well as a beat on earnings. MCD is expected to report revenue of $6.29B in revenue for the second quarter and EPS of $2.79. Notably, EPS estimates have been raised 24 times over the past 90 days and lowered once.
UBS is also calling for the french fry purveyor to raise operating margins. UBS has a Buy rating on MCD and price target of $330.
“MCD shares can continue to move higher given strong momentum in key markets globally, earnings upside potential over the coming yrs, and defensive attributes supporting resiliency,” UBS wrote.
Earlier this month, Seeking Alpha analyst Dair Sansyzbayev said, “McDonald’s (MCD) has demonstrated strong financial performance, with profitability metrics expanding notably, and the upcoming earnings release is expected to inspire investors further.”
“Despite high valuation multiples, my valuation analysis suggests the stock is about 9% undervalued,” Sansyzbayev said.
Shares of MCD are up 16% year-to-date.