McDonald’s ‘Dominates’ Affordability Positioning – Piper Sandler By

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By Sam Boughedda

A Piper Sandler analyst raised the firm’s price target on McDonald’s (NYSE:) shares to $270 from $263, maintaining an Overweight rating on the stock in a note Wednesday.

The analyst said McDonald’s same-store sales remained strong in August, the third consecutive period, due to affordability.

In addition, their operator field checks suggest August comps were 5%, up 100bps sequentially, and compares to their 3Q22E comp at 4% and the Street at 3.8%.

“In the field, we dug into food at home vs. food away from home costs and calculated ~20% more value, or less price per person, attributed to the latter. We compared four McDonald’s quarter-pounder meals ($5-$6 for 4 people) against the same meals replicated at home ($6-$7 for 4 people),” added the analyst.

“McDonald’s dominates the affordability positioning, which is not a proxy for the industry per se, and is based on their global scale advantage,” she concluded.

McDonald’s shares are up almost 2% at the time of writing.

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