NEW YORK (TheStreet) -- McDonald's (MCD) - Get Report same-store sales trends will turn positive by the end of this year, predicted RBC Capital, which upgraded its rating on the fast food giant to Outperform from Sector Perform.

WHAT'S NEW: McDonald's risk/reward ratio is positive, as its same-store sales growth will turn positive by the end of this year and it should deliver "outsized" profit growth beginning in the second half of 2015, RBC analyst David Palmer forecast. In the U.S., the company is developing strategies to improve its food quality, enhance its marketing, make its menu more customizable, and launch a digital payment system, Palmer believes. Overseas, the end of crises in Japan, China and Russia will boost McDonald's fortunes, the analyst added. For 2016 and 2017, Palmer now expects the company's earnings per share to rise 13% and 10%, respectively, up from his prior outlook for 9% and 8% increases. Share repurchases and proceeds from refranchising, along with new initiatives, will boost the fast food giant's EPS, Palmer believes. Trading at a significant discount to its restaurant peers, McDonald's can upgrade its core product, and more easily implement "mass personalized marketing" through digital technology than the average restaurant company, according to Palmer. The analyst hiked his price target on the name to $115 from $93.

WHAT'S NOTABLE: Also this morning, analysts at Janney Capital said they had previously been more optimistic on McDonald's U.S. sales in February after what appeared to be a strong first half of the month. However, the firm cut its U.S. same-store sales estimate for last month by 200 basis points to down 1% following conversations with "multiple industry sources." Janney maintained its Neutral rating on McDonald's shares.

PRICE ACTION: In mid-morning trading, McDonald's shares gained 0.2% to $99.92.

Reporting by Larry Ramer.

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