McDonald's Stock Just Reached An All-Time High

OAK BROOK, Ill. (TheStreet) — McDonald’s(MCD ) shares pushed up to an all-time high Tuesday morning as investors anticipate a strong report on November sales.

McDonald’s shares tapped an all-time high of $80.50 Tuesday morning, and traded around $80.44 an hour into the session.

McDonald’s is due to report its November monthly sales figures on Wednesday. Analysts’ consensus is for the Golden Arches to report comparable U.S. same-store sales growth — or sales at stores open at least one year, a closely watched metric in the restaurant industry — of 5.1% for the month.

Deutsche Bank analyst Jason West expects McDonald’s to report U.S. comps growth of 5% for November, compared with a 0.6% decline in the year-earlier month.

“We look for US momentum to continue in Nov. as compares ease slightly vs. October and helped by national McRib [limited-time offering] and softening competitive environment,” he noted.

In Europe, West expects McDonald’s to report 3.5% comps growth for November, below the consensus for same-store sales growth of 4.9%. In Asia/Pacific, Middle East and Africa he expects to see growth of 6%.

In October, McDonald’s grew global comps by 6.5%. By region, October comps grew 5.6% in the U.S., 5.8% in Europe and 5.3% in Asia/Pacific, Middle East and Africa.


Photo: TheStreet

For the third quarter McDonald’s beat top- and bottom-line expectations, growing profits 10.3% to $1.39 billion and revenue 4.1% to $6.3 billion.

McDonald’s said its nationwide promotion of McCafe Frappes and Smoothies, plus the everyday affordability of its Dollar Menu, helped boost sales in the quarter.

Investors should continue to keep a close eye on food costs, which are generally going up, said Janney Capital Markets analyst Mark Kalinowski in an appearance on CNBC, pointing out that McDonald’s gross margins where better-than-expected in the recent quarter, indicating the company is addressing any qualms shareholders may have with its fundamentals.

Kalinowski explained that fast food operators like McDonald’s are typically better able to cope with rising commodity and other input costs because of their highly franchised model of operations. Franchisees bare the brunt of higher food costs, not the franchisor, he said.

— Written by Miriam Marcus Reimer in New York.

This article originally appeared at TheStreet and is republished here with permission.

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