McDonald's (MCD) Stock Retreating After-Hours, Fresh Beef Push Raises Safety Concerns

McDonald's (MCD) stock is lower in after-hours trading as franchisees say the push for fresh beef could lead to food-borne illness outbreaks.
By Natalie Walters ,

NEW YORK (TheStreet) -- Shares of McDonald's (MCD) - Get Report are retreating 0.35% to $126.06 in after-hours trading, after a survey from Nomura revealed that franchisees have safety concerns about the push for fresh beef. 

The McDonald's franchisees who took part in the survey said that upgrading to fresh beef from frozen beef could lead to slower service, as well as foodborne illness outbreaks, CNBC reports

"An uncaring employee doing something that puts the entire system at risk," one franchisee said. "We are the lightning rod. Chipotle (CMG) will be a walk in the park if we have an incident."

The Oak Brook, IL-based fast food chain is currently testing fresh beef in 14 locations in Dallas. While the switch could improve the public image of the chain, the majority of franchisees see the upgrade as "purely a marketing move" that its loyal customers won't appreciate. 

"The only ones who care are the ones who don't eat at McDonald's," one franchisee said.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate MCDONALD'S CORP as a Buy with a ratings score of B. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, notable return on equity, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

You can view the full analysis from the report here: MCD

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