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Why Did Kalinowski Upgrade McDonald’s?

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Jun. 8 2018, Updated 11:51 a.m. ET

Kalinowski’s recommendation

On June 7, Kalinowski Equity Research upgraded McDonald’s (MCD) from “neutral” to “buy.” The firm set a price target of $191.00 for MCD stock. Kalinowski’s price target represents a return potential of 12.7% from its current stock price.

Mark Kalinowski, president and CEO of Kalinowski Equity Research, stated in his research note that the introduction of fresh beef in the domestic market has helped improve McDonald’s SSSG (same-store sales growth). He added that his channel checks showed an increase in traffic at domestic restaurants during April and May. McDonald’s traffic in the first quarter was negative.

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Other analysts’ recommendations

Of the 32 analysts that follow McDonald’s, 65.6% are favoring a “buy,” and 34.4% are favoring a “hold.” None of the analysts made a “sell” recommendation. On an average, analysts expect McDonald’s stock price to reach $186.73 in the next 12 months, which represents a return potential of 10.2%.

McDonald’s stock is trading below analysts’ 12-month price target. However, this doesn’t mean an automatic “buy.” Investors are advised to analyze the analysts’ revenue and EPS expectations discussed in our next article before making any investment decisions.

Peer comparisons

McDonald’s peers’ price targets and return potential metrics follow:

  • Wendy’s (WEN): price target of $19.02 with return potential of 11.6%
  • Jack in the Box (JACK): price target of $97.71 with return potential of 18.8%
  • Restaurant Brands International (QSR): price target of $68.13 with return potential of 12.2%.

Next, we’ll look at McDonald’s stock performance.

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