#6 - McDonald’s (NYSE:MCD)
McDonald’s (NYSE: MCD) - The problem: The right solutions for the wrong problems
McDonald's is a company that continues the process of re-inventing itself but not really. And that's the good news. The company has figured out that there are some customers they may not be able to reach. These customers have grown up with more fast-casual options that make McDonald's seem less of the Mac Daddy it was a generation ago. With that said, it's important to note that their move to upgrade the décor of their stores and customer service options (including pre-ordering and home delivery in some markets) may be confusing to investors. Automation is nice and certainly features like ordering through a mobile app or in-restaurant kiosks may improve the customer experience, but they aren't going to necessarily reduce the companies need to have actual employees preparing the food. Second, the fact that a lot of competitors to McDonald's are going through tough times isn't really going to improve McDonald's sales. As we said, the company has their customers and just because a competitive franchise shuts its doors doesn't mean those customers will seek McDonald's as an option. To be sure Burger King remains their largest competitor.
What may concern investors more is that the company has reported 16 straight quarters of decreasing top-line growth, including a drop of 12% in the last quarter. The stock has been taking a hit lately but has rebounded to around $163 per share. That’s down from a high of $178.70 in February.
About McDonald's
McDonald's Corporation operates and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, desserts, sundaes, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions.
Read More - Current Price
- $290.28
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 18 Buy Ratings, 12 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $319.46 (10.1% Upside)
