McDonald's continues to drive growth, further upside exists

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McDonald's continues to drive growth, further upside exists - Tigress Financial

Published Mar 09, 2023 01:18

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McDonald's continues to drive growth, further upside exists - Tigress Financial

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By Sam Boughedda

Tigress Financial Partners analysts reiterated a Buy rating and raised their price target on McDonald's (NYSE:MCD) shares to $330 in a note Wednesday, telling clients that its resilient business model continues to drive strong performance in all economic cycles.

In addition, they stated that McDonald's "Accelerating the Arches" strategy continues to drive further growth.

"MCD's strong brand equity and value proposition help consumers overcome inflationary pressures. MCD's Accelerating the Arches strategy continues to drive growth and build brand strength, driving strong 2022 performance, comparable sales growth and increased guest traffic," the analysts wrote.

They also believe the strategy will continue to drive increased sales growth and profitability due to its increasing emphasis on new restaurant openings and its recently announced "Accelerating the Organization" initiative, which they feel "will complement this strategy."

They also pointed to McDonald's integration of AI technology as a positive looking forward.

"MCD continues innovating and introducing new growth initiatives to integrate AI technology to automate its drive-thru process. MCD's growth
initiatives, including AI-based voice ordering, digital marketing, supply chain management, and ongoing innovation, will continue to drive long-term business trends and market share gains, increasing Return on Capital, growing Economic Profit, and greater shareholder value creation," the analysts added.

"We believe further upside in the shares exists, and our 12-month target price of $330 combined with dividends represents a potential total return of over 25% from current levels."

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