McDonald's Corporation - A Wax Ink Raw Value Report
At the end of fiscal 2008, McDonald's Corporation (NYSE: MCD) there were 31, 967 restaurants in 118 countries in the McDonald's system, 25,465 operated by franchisees and 6,502 operated by the company.
Based on a five (5) year hold, the company is on our watch list with a Reasonable Value Estimate of $79, a Buy Target of $39, a First Sell Target of $77, and a Close Target of $83.
As found elsewhere in this report, management believes that the company will continue to drive success in 2009 and beyond by remaining focused on being better, not just bigger.
Management further believes that the company will do this by further enhancing its understanding of consumers’ needs and wants; facilitating greater sharing and adoption of best practices and new ideas worldwide; and leveraging a strategic approach to implementing initiatives to drive the best bottom-line impact.
We’ve heard bullsh_t in our day, but never has it been so eloquently presented. It is statements like that which lead us to believe, at least until proven to us otherwise, that management is not only clueless about the world economy, but the company’s place in that economy as well.
In our opinion, coupling bullsh_t like management’s outlook for 2009, with what we believe was a gamble on the part of management to keep the company’s stock price propped up during 2008 by buying back company stock instead of reducing or maintaining the status quo when it came to debt, will inevitably lead to disaster for the stockholders of this company.
Accordingly, it is our opinion that management has introduced, through their ineptitude, greater risk for investors. As a result we are lowering our Buy Target for the stock to from $39 to $20.
While this is a price point not seen since 2003, considering what we believe was and is the complete and utter folly of management, a $20 price point may be here faster than any of us knows.
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