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Morgan Stanley taps old-school McDonald's for a 20% gain

  • McDonald's (MCD +0.3%) has been thrashed around a little bit by the investment community as the love affair with Panera Bread, Chipotle, and Buffalo Wild Wings goes on, but Morgan Stanley likes the company's strong history of out-performance.
  • The firm upgrades McDonald's to an Overweight rating to go along with a $115 price target. The PT reps 20% upside potential.
  • "...MCD is cheap on an absolute and relative basis and offers a better risk/reward profile," notes analyst John Glass.
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Comments (9)
  • omarbradley
    , contributor
    Comments (966) | Send Message
     
    well..technically they do produce "food." and obviously its safe to drink the water and they have good clean bathrooms.
    9 Jan 2014, 10:57 AM Reply Like
  • BradyStreet414
    , contributor
    Comments (11) | Send Message
     
    I have purchased MCD monthly for the last 25 years, month-in, month-out. As the scapegoat for the industry, MCD can receive its fair share of criticism, but it honestly tries to meet its obligations as the industry leader. It tries to be "green", it offers healthy products that very few people "buy" (water, fruits, oatmeal, salads, lite-versions of sandwiches), it revamps restaurants, it adapts pricing, it supports charities, it constantly tries new products, and it offers employment at legal wages for those who seek this type of work. Can they improve? Absolutely. But no organization of this scale can turn quickly. Patience is warranted.
    9 Jan 2014, 01:54 PM Reply Like
  • chopchop0
    , contributor
    Comments (4005) | Send Message
     
    Hopefully they won't have any more of these quarterly reports chock full of managerial misfires..... millions and millions of leftover chicken wings anyone?
    9 Jan 2014, 02:32 PM Reply Like
  • Steve Tinnes
    , contributor
    Comments (74) | Send Message
     
    I agree with you Brady. Pundits complain about mistakes. All I can say is so what. They would complain if McD didn't try new things. They probably are not old enough to remember "Triple Ripple" which was an ice cream cone that didn't sell. Mcd isn't the leader because they never make mistakes. Maybe they will make lemonade out of a lemon. Take McRib for example, it's now a promotional item rolled out every so often. They tried a quarter pound sandwich with lettuce and tomato back in the late 70's similar to the wopper which was a great sandwich, but didn't sell. They tried a steak sandwich back in the early 80's with intent of increasing dinner business. It was an awsome sandwich if you got it right off the grill. It was a flop. What would the pundits say if Chicken McNuggets were a flop? They would say the same thing that they are saying about the chicken wings. Very easy to criticize, but that's all they know how to do. The attitude of McD is, you never fail until you stop trying. The pundits would complain if they did.
    10 Jan 2014, 01:27 PM Reply Like
  • Steve Tinnes
    , contributor
    Comments (74) | Send Message
     
    I've also been buying Mcd for 42 yrs, and I like the food. Started with it back in 1955. I enjoy watching them keep trying things. Technically it is food, and good food at that. In most cases, it's as good as if not better than what you would buy in a grocery store. So lets see 1955-2014, that's 59 yrs of eating at McD. I am not fat, very healthy, excercise daily, blood pressure of 118/88.
    10 Jan 2014, 01:37 PM Reply Like
  • Dr Fred
    , contributor
    Comments (92) | Send Message
     
    What a pleasure to read favorable comments about MCD. I am so tired of the pseudo-nutritionists who are forever bashing MCD food quality. Truth is with all their quality controls
    MCD probably has a lot better food than most of the restaurants they patronize. I would a lot sooner have a hamburger and a milkshake once in a while than the raw fish (sushi) they rave about.
    10 Jan 2014, 03:39 PM Reply Like
  • swampfox1
    , contributor
    Comments (90) | Send Message
     
    Omarbradly, your lack of knowledge about their products, coupled with all of your whining won't knock it down to where you sold out~~~Stay out,find something that you have a chance of understanding~~~perhaps bowling..
    10 Jan 2014, 03:59 PM Reply Like
  • Oxyman
    , contributor
    Comments (111) | Send Message
     
    Don't knock "sushi", what's a couple of intestinal parasites among friends! Think I'll stick with the burgers, thank you......
    10 Jan 2014, 04:46 PM Reply Like
  • amg mic
    , contributor
    Comments (32) | Send Message
     
    I have not owned MCD as long as bradystreet and it has done well over that time.
    Congrats on your disciplined investing!
    I have owned MCD many years ago but did not hold for more than a year or 2.
    My most recent purchase of MCD was only about 2 and a half years ago at 83.83 since then I have acquired a little over 400 shares. The dividends that I reinvested have very slightly raised my basis since it has paid divi at 99.31, 98.92, 98.75 . For those who practice DRP or just auto reinvest I suggest look at your dividends and decide if it is better for you to take the shares or the cash.
    On January 2 of 2013 MCD closed at 90.12 today a little over a year later it closed @ 95.80 giving 6.3% return add in the divi of 3.5% and MCD produced almost 10%. Not a bad return. Looking at how the market did overall and how many stocks produced significantly higher returns the burger and fries don't look so good.
    However if you are looking for a place to park your money that will provide some stability with a decent return certainly more than money market and CD, MCD is a winner. I can trade out of MCD if I choose to buy something else at the push of a button.
    In comparison with growth stocks I was fortunate enough to buy XLRN at 18 on Nov 6and did just sell some when it went above 40. A few days ago. Doubled my money in a few months! Would I keep my money in XLRN For several years? Probably not. Will I keep my remaining shares now that I recouped my principal and took a little profit as well absolutely! with a stop limit GTC order I will keep moving that limit if the stock continues to climb.
    Some people like the disciplined long term approach and it can do well. Some like to trade more often still others like myself do both. MCD is not a stock to be traded but if you look at its past performance holding it over the long term does not look so bad. I don't eat MCD often but every now and then I get a Big Mac and fries attack and it still tastes good!
    10 Jan 2014, 09:01 PM Reply Like
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