Investing.com -- Shares in both McDonald`s Corporation (N:MCD) and The Wendy`s Co (O:WEN) were relatively unaffected on Monday by a pair of upgrades by analysts at Nomura Securities, amid strong signals of favorable same-store sales growth across the quick-service hamburger sector.
On Monday, Nomura increased its 2015 fourth quarter same-store sales projections for Wendy's by 40 basis points to 3.6%. At the same time, Japan's leading securities and investment banking company rose its same-store expectations for Wendy's franchised stores by 140 basis points to 4.4%. In November, Wendy's received an upgrade by analysts at RBC Capital, after reporting promising results with its "4 for $4" promotion. Nomura pointed to the success of the sales initiative as a primary factor for its upgrade of Wendy's stock on Monday.
Nomura also upgraded McDonald's stock to a buy from a neutral on Monday morning, while lifting its price target from $112 to $135 a share. The Japanese firm is confident that McDonald's same-store sales have risen sharply since it launched an All-Day breakfast initiative in October.
Also on Monday, Wendy's announced that it will transition to 100% cage-free egg dependence on its menus at its U.S. and Canadian locations by 2020. The Dublin, Ohio-based company also said it is committed to eliminating the use of gestation stalls from its pork supply chain by 2022.
"Animal welfare is a core part of our company's role as a responsible corporate citizen," said Liliana Esposito, Wendy's Chief Communications Officer. "We're proud of our commitment to move to 100 percent cage-free eggs for our breakfast items and will continue to incorporate evolving best practices in the areas of animal handling and welfare into our supply chain requirements."
Supply chain management among U.S. fast-food restaurant has received added scrutiny in recent weeks since Chipotle Mexican Grill Inc (N:CMG) suffered an E-coli outbreak in mid-November that has impacted hundreds of customers throughout the U.S. On Monday, the Centers for Disease Control (CDC) linked the strain to three additional states, lifting the total number of states impacted nationwide to nine.
Over an eight-year period through 2006, McDonald's invested more than $300 million in Chipotle, when it operated 13 chain restaurants in Colorado. The two companies still share some supply-chain operations by conducting business at a number of the same distribution centers and processing facilities, Bloomberg reported.
Shares in McDonald's gained 0.29 or 0.25% in after-hours to 117.99, while Wendy's shares lost 0.12 or 1.12% to 10.55.