The fast food chain giant has seen its fair share of rough time but better days lie ahead.
On December 29, 2015 McDonald’s Corporation hit its all-time high during the trading hours at $120 per share. Since mid-October the stock of the multinational corporation has rallied. In a year-to-date estimate, despite of the increased competition in the market, the stock has managed to increase by as much as 28%.
Many give the credit to Steve Easterbrook, the new chief executive officer who was appointed the position back in March, for the positive momentum of the corporation. After he took charge, in order to increase the sales, he introduced the all-day breakfast menu. This strategy turned out to be quite positive as the sales succeeded to increase in many restaurants all across the globe. NPD Checkout Tracking Study indicates that by making this move the orders for breakfast rose to 47% from an initial percentage of 39%, throughout the day.
Another change that occurred after the appointment of the CEO was that, he started to sell off underperforming restaurants of the company to franchisees mainly to increase the sales. This move would earn $300 million for the fast food chain giant through which it would establish better performing business elsewhere. This has proved to be the major reason for the stock to rise. For the upcoming year, it plans to be 95% franchised; with a global franchising target to reach 4000 from 3500 by the year 2018.
According to Zack’s Research, McDonald’s Corporation will be posting its latest earnings on January 25, 2016. As per the estimations of analysts, it will be posting earnings per share of $1.22. Brokerage and research firms anticipate a target price of the stock somewhere between $130 on the high end and $100 on the lower end, along with a standard deviation of $10.079.
Recommendations of the stock experts suggest a ranking of 2.18 for McDonald’s stock, putting it close to a rating of Buy. This recommendation has been given by over 15 analysts. The analysts at bidnessetc.com believe that the stock is likely to perform well in 2016 as well. The shares are up by 26.5% in 2015.
The hamburger chain reported net income of $1.31 billion indicating an increase of 22.5% in comparison to the figures a year prior, which were $1.07 billion. Investors of the giant fast food corporation were informed in a meeting that the business intends to give back $30 billion back in cash to its shareholders via dividends. It is expecting a sales growth of 3 to 5% for the next year.