McDonald’s shares hit a fresh all-time high on Friday, second-quarter comparable sales top estimates supported by new promotions, renovated stores

July 29, 2019 7:53 am

McDonald’s Corp’s quarterly US same-store sales topped Wall Street estimates, since the company managed to lure more customers with revamped stores and new promotions (for example, the 2 for $5 Mix and Match deal).

McDonald’s shares closed higher for a second consecutive trading session in New York on Friday. The stock went up 0.53% ($1.14) to $215.58, after touching an intraday high at $218.97 and also a fresh all-time high.

Shares of McDonald’s Corporation have risen 21.41% so far in 2019 compared with a 20.70% gain for the benchmark index, S&P 500 (SPX).

In 2018, McDonald’s Corp’s stock went up 3.17%, thus, it again outperformed the S&P 500, which registered a 6.24% loss.

McDonald’s total revenue was reported at $5.34 billion during the quarter ended on June 30th, flat compared to the same period a year earlier. In comparison, analysts on average had expected revenue of $5.33 billion.

Sales at restaurants in the United States, which are open for at least a year, registered a 5.7% year-on-year growth during the past quarter, or the sharpest growth rate since McDonald’s all-day breakfast was launched in 2015. Analysts on average had anticipated a 4.47% increase in US comparable sales.

Same-store sales went up 6.5% internationally, supported by growth in Germany, France and the United Kingdom. The figure compares with a median analyst estimate of a 5.08% growth.

The fast-food chain has been renovating its 14 000 US restaurants by adding digital ordering kiosks, pay and pickup services and by improving its mobile app.

At the same time, deals such as the $1, $2, $3 value menu have been introduced along with various breakfast items such as Donut Sticks.

McDonald’s earnings per share, which exclude special items, were reported at $2.05 during the second quarter, while matching a consensus of analyst estimates.

During a post-earnings call with analysts, Steve Easterbrook, McDonald’s Chief Executive Officer, noted that delivery would be a $4 billion business this year for the company and its franchisees.

Analyst stock price forecast and recommendation

According to CNN Money, the 25 analysts, offering 12-month forecasts regarding McDonald’s Corporation’s stock price, have a median target of $230.00, with a high estimate of $245.00 and a low estimate of $203.00. The median estimate represents a 6.69% upside compared to the closing price of $215.58 on July 26th.

The same media also reported that at least 21 out of 30 surveyed investment analysts had rated McDonald’s Corporation’s stock as “Buy”, while 7 – as “Hold”.

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