(CercleFinance.com) – Bank of America announced Tuesday that it had raised its price target on McDonald’s from $277 to $291, while maintaining its ‘neutral’ opinion on the stock.
In a note published the day after the publication of the fast food giant’s 3rd quarter results, the investment bank says in particular that it retains a market share which remains stable in the United States.
BofA nevertheless points out that it seems that McDonald’s is gaining market share among Americans from the upper middle class, but that it is losing ground among the most modest consumers, that is to say those earning less than $45,000. annuals, while this category was until now its strong point.
Internationally, the group continues to do better than its competitors, she adds, a dynamic that the New York firm attributes to the absence of real leading competitors.
BofA is thus raising its adjusted operating margin forecast for the financial year from 46% to 47%, both due to good cost control but also in view of real estate gains against a backdrop of increasing power in the granting of franchises.
In terms of valuation, the bank emphasizes that the stock is currently trading on the basis of 1.3x an equally weighted S&P 500 index, compared to a five-year average of 1.2x.
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