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Analysis of McDonald’s, an American company operating in the food service sector

Analysis of McDonald’s, an American company operating in the food service sector

23 December 2020

McDonald’s is an American company operating in the catering sector. Currently #MCD is the world’s largest fast food restaurant chain. The company is represented in almost all countries of the world. The main factor in the company’s success is that it operates on a franchise model. Thus, the company relinquishes its obligation to operate each of the hundreds of thousands of restaurants. Franchise buyers are required to pay royalties equal to 12% of annual revenues.

The company’s main competitors are Yum! Brands, which includes the well-known KFC, Pizza Hut and Taco Bell, Chipotle Mexican Grill Inc and Starbucks Corp.

It should be noted that the company’s management follows trends. So in many countries, vegetarian products began to appear in McDonald’s restaurants.

Revenue: $ 5.4B Q3 ​​(-0.1% YoY)

Operating Income: $ 2.4B Q3 ​​(+ 1.2% YoY)

Net Income: $ 1.8B Q3 (+ 12% YoY)

Earnings per share: $ 2.22, better than $ 1.90 forecast

Due to the specifics of the industry and the growing number of online orders, the company managed to survive the crisis pretty well.

Income by region:

International Operated Markets – 54.08%

U.S. – 37.21%

International Developmental Licensed Markets & Corporate – 8.71%

Current Quarter EPS Forecast: $ 1.82

Healthy food trends are one of the risks for the company. And even though restaurants are adapting menus to changing consumer tastes, #MCD is still not a healthy food restaurant.

Thus, McDonald’s is a successful company and a globally recognized brand. Thanks to the franchising system, the company gets rid of both the costs of operating restaurants and possible risks. However, current trends in healthy nutrition can seriously affect the company’s attractiveness to investors.

According to MCD, the completion of the correction at the level of 200 suggests itself.

It is from this point that it makes sense to get up in the long term. If you manage to buy at 200, then the minimum goals will be 230, which is + 15% of the entry.


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