McDonald’s Shares Rise on Evercore ISI Upgrade

Fast food giant McDonald’s saw its shares experience a modest pop on Monday after receiving an upgrade to “outperform” from “in line” at Evercore ISI.

According to the firm’s analyst Matt McGinley, McDonald’s “stock will likely outperform should equity volatility related to trade persist.”

McGinley notes that McDonald’s outperformed the S&P 500 by 82 percent during the last recession
a decade ago and continued to grow its operating profit.

“[McDonald’s] is the most defensive restaurant stock, it has less exposure to emerging economies, and the stock will likely outperform should equity volatility related to trade persist,” McGinley wrote in a note.

McGinley has said that the global fast-food chain has only become more defensive over the last decade.

McDonald’s economies of scale is of “increasing importance amid labor inflation, remodel investment, and a higher promotional cadence,” than compared to the rest of the restaurant industry.

While the firm does not have a price target on the stock it does have a “base case” of $185 a share.

Disclaimer: We have no position in McDonald’s Corp. (NYSE: MCD) and have not been compensated for this article.