McDonald's Corp (MCD)

Look for a pull back to around $50/share.

McD has done everything right for multiple years: advertising/marketing, menu mix, new product introductions / limited time offerings. The depth and breath of advertising forces most, if not all, fast food competitors to follow McD's lead: add sweat tea, upgrade coffee, sell double cheeseburgers for a buck, etc.

Restaurant brands/concepts have cycles. Every seven to ten years has a peak and valley as far as same-store-sales. Pusing the dollar menu and $1 sweet tea from the end of '07 through '08 secured and increased a foundation of transactions with high gas prices, rising unemployment and global fears of a recession. McCafe, an affordable indulgence, grew transactions with the hope that a legilized drug (caffeine) would result in a permanent increase in transactions in '08. Likewise, pushing angus burgers when frequent customers are getting tired of living off the dollar menu in '09 was smart. Unfortunately, core customers will get tired of the brand and take a break before returning - it's unavoidable.

Due to over-capacity in the segment, fast food is a zero sum game in that customer that will be lost by McD, will migrate to a popular competitor (Sonic). Alternatively, high unemployment may result in those lost transactions just eating at home. No chance of keeping up with the S&P in an up market.

Longer-term under-performance is unlikely. McD controls the fast food segment and, short of screwing up quality service cleanliness, and is the only domestic concept with an average-unit-volume that is high enough to profit regardless of menu mix. Buy for it's value and dividend below $50/share because management is too smart to let same-store-sales flounder.

expect the company to underperform S&P

Economy is in the tank. More people should be going to McDonalds to eat instead of Outback. Stock should be going up. So why are the CEO and the board selling thier stock? Something is wrong here.

Contrarian, I like this. The economy as a whole is going to sink a lot of ships. There's downside here and even McD's is going to suffer from it. I like making money, shorting is like "shooting fish in a barrel" (dangerous but sure, especially when the barrel explodes) in this market place and with this government interventionism. I'll choose to continue to make the money, regardless of the size of the corporation or the popular sentiment.

Some day Americans will wake up and they wont want to be fat, lazy, and pathetic. When that happens look out McDonalds.

Seems to high at $56.17 McDonalds is so big now that they have little room to expand and what they will expand can't possibly grow them faster than 5-6% a year on average. The P/E right now is set more for 10% growth and that's not likely.

Don't get me wrong this is a great company and a very safe investment, but it will not in the long run outperform the SP500 (even if it is one of the stocks in the SP500).

not enough growth to outperform the mkt

Recession here, officially imo. MCD takes dives during this time as folks stop the fast food lunches and snacks and opt to bringing their own food to work and eating more at home. If they hit MCD they get a dollar menu item, not exactly good for MCD's bottom line.
MCD and fast food chains collapsed in 2001-2003, it will happen again.

My thinking here is simply that big slow companies like this that were already pretty high on the P/E scale can bounce less than the overall market from the lows.

McD is still a good company, but it will suffer in caps from this point due to market bounce being disproportionate

Cant afford my electric bill but I will still get a coffee in the morning anf then my fat ass will eat a $.99 double cheese burger maybe 2.

black monday part 2 was scary. grimace day for wall street. ronald must be hanging out with the clowns in congress. mcdonalds stock will be the next to drop. mayor mc cheeese cant help but watch. pe at 15 is decent right now but what will happen if e goes down? i say underperform til stock goes to 45. mcd should be a safe investment if bought at a fair price. i would buy it at 25 - 30 if it happens.

Although this is a great stock and has recently been up, (to its 52 week high) I cant see it going much further. No major gains but then again no major losses in the near future. Expect this stock to continually grow in the next few years because of the franchises growth in China and other countries experiencing industrial growth. If i owned any Mcd i would HOLD, but since I do not I am willing to let it drop a bit more before buying in for the long haul.

Overbought on fear.

overrated and bad food quality

A litle ahead of itself...

I had this underperform a few months ago. Looks like it is overheating again. My comment before was with rising food prices, Dollar menu would be the buck and a half menu. I had a premonition - see below. (from WSJ http://online.wsj.com/article/SB121780568775808337.html?mod=yhoofront)

McDonald's Tests Changes

In $1 Burger As Costs Rise

By JANET ADAMY

Oak Brook, Ill. -- McDonald's Corp. is testing modifications to its popular $1 double cheeseburger, and higher prices for the sandwich, as it prepares to change its Dollar Menu by next year.

In an interview, Don Thompson, president of McDonald's U.S. business, said the company has tested ways to make the burger less expensive to make. Some restaurants are selling it with one slice of cheese instead of two, and billing it as a "double hamburger with cheese." Others are offering a double hamburger without cheese. Some are selling the traditional double cheeseburger at prices ranging from $1.09 to $1.19.

Capuccinos and other espresso drinks were off their peak in several main markets where they're being sold. Mr. Thompson said "the numbers really don't tell the story."

Lower-priced beverages, including $1.89 iced coffee and a $1 fountain-drink and sweet-tea promotion, have pulled some sales away from the espresso drinks, which range from about $2 to $3. That was something the company hadn't anticipated, he said.

McDonald's overall beverage expansion, adding espresso drinks, smoothies, cold tea, bottled drinks and ice-blended coffee beverages at U.S. locations, is on track to exceed the company's goal of adding $125,000 a year in sales per restaurant, even though it doesn't yet have national advertising behind it, Mr. Thompson said. He sees McDonald's target of the drinks adding $1 billion a year to the company's sales as "definitely achievable." The rollout will be complete at the end of 2009.

This shouldn't be near it's 52-week high when their COGS are going to start increasing.

McDonnald's isn't raising their prices at all with the prices of food commodities raising and a more healthy America means less profits for Mc' D's

You can't go wrong with a steady stock like this. Also, with the summer filled with blockbuster McMovies, McDonalds is the place to be.