By Sam Boughedda
UBS analysts said in a note Friday that McDonald's (NYSE:MCD) defensive attributes with growth momentum can still work.
The analysts, who have a Buy rating and a $305 price target on MCD shares, also stated the fast food chain's global sales strength and defensive attributes support further upside.
"MCD shares remain well positioned given defensive attributes in an increasingly difficult macro and strong global sales momentum driven by key competitive advantages (i.e. execution, digital, marketing, asset base)," wrote the analysts.
Looking ahead to McDonald's earnings release, UBS believes "key investor expectations are for 4Q U.S. sss of 9%+, w/ International Operated Markets (IOM) segment results expected to largely maintain momentum."
The analysts also said the focus will be on U.S. sales trends, the resiliency of the European customer, margins, and additional details on the Accelerating the Arches 2.0 initiative.
"We raise our '22 and '23 EPS estimates to $9.98 and $10.70, largely to reflect increased sales assumptions and FX impacts," said Geiger. "While valuation remains closer to the upper end of historical ranges, we believe shares can cont. to grind higher given MCD's strong momentum in key markets globally, and defensive trade-down attributes supportive of outsized resiliency in a difficult macro."