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McDonald's Corporation - Value Alert

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May 28, 2013 – Comments (2) | RELATED TICKERS: MCD

Texas (May 28, 2013) Wax Ink has issued a Loss of Investment Interest rating for McDonald’s Corporation (NYSE: MCD) based on a recent baseline equity review which placed fair value between $50-$60.

The recent close of $100.29 is approximately 233% above the fair value buy target for the stock and approximately 62% above the fair value close target for the stock. The recent close is also 8% below analysts’ twelve-month $109.00 median price target for the stock.

The recent close represents a 23% increase in price since the last baseline equity review was conducted in August 2011.

The stock currently has a trailing twelve-month PE Ratio of 15, and a PEG Ratio of 1.8 basis estimated forward earnings growth of 8.5%.

In the past 52 weeks, share prices have moved between a high of $103.70 and a low of $83.31, placing equilibrium at $101.11.

With the recent close, the stock is trading 3% below the 52 week high, 17% above the 52 week low, and 1% below equilibrium, and has an average daily trading volume of 13.16 million shares.

McDonald’s Corporation franchises and operates McDonald’s restaurants in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America.

The company’s competitors include Yum! Brands, Inc., The Wendy’s Company, and Jack in the Box, Inc.

Financial information that may be contained herein, is based on the company’s most recent annual SEC filing for year ending December 31, 2011. All prices are per share unless otherwise noted.

Wax Ink currently has no investment position in the company mentioned in this alert.

Wax Ink is a baseline equity research company comprised of individual investors, NOT licensed or registered with ANY government agency.

For use by Accredited Investors as defined under Title 17, CFR §230.500, Regulation D

Copyright © 2013 Wax Ink

2 Comments – Post Your Own

#1) On May 28, 2013 at 2:33 PM, chk999 (99.98) wrote:

A $60 handle on MCD would give it a dividend yield over 5%. That would give you utility company yield on a company with a 36% return on equity. At that price I'd sell the internal organs of relatives to load up on it. I think seeing that price is unlikely.

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#2) On May 28, 2013 at 8:52 PM, rd80 (98.66) wrote:

+1 rec for laying out your opinion.

FWIW, I think the only way MCD share prices reaches the $50-$60 range is if it splits.

Like chk99 said, the dividend yield and valuation would just be too attractive well before it dropped that far and I can't see business falling off enough to cut the share price nearly in half.

Disclosure:  Long MCD.

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