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McDonald's Stock Upgraded to Overweight by Piper Sandler

McDonald's has an 'industry-leading' ability to deliver on consumers' preferences, Piper Sandler says.
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McDonald's  (MCD) - Get McDonald's Corporation Report is "uniquely positioned" to take market share despite cost pressures and operational challenges, according to a Piper Sandler analyst who upgraded the fast food titan to overweight from neutral and raised her price target to $282 from $232.

Shares of the Chicago company were off slightly to $267.62 at last check.

Analyst Nicole Miller Regan said in an investor note that recent survey work leaves her "incrementally confident" around McDonald's "industry-leading" ability to deliver on consumers' preference for drive-thru experiences and elevated demand for core hamburger and chicken cuisine categories, according to the Fly.

While the cost pressures and operational challenges facing the broader industry are real, Regan said McDonald's is "uniquely positioned" to leverage its size, scale, operational capabilities, and ongoing investments to take share as it "leans into the high-level consumer trends highlighted by our latest survey." 

The restaurant chain's recent recommitment to share repurchase "rounds out its total return policy," the analyst said.

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McDonald's recently announced plans to expand a pilot program to automate its drive-through lanes as part of its partnership with IBM  (IBM) - Get International Business Machines Corporation Report.

In October, McDonald's posted stronger-than-expected third quarter earnings as higher U.S. menu prices, as well as larger order sizes, boosted sales for the restaurant chain.

Same-store sales rose 12.7% for the period on a global basis while U.S. sales jumped by a better-than-expected 9.6%.

Earnings came to $2.86 a share, up 42.2% from a year ago and 40 cents ahead of Wall Street forecasts. Revenue rose 14.4% to $6.2 billion, topping analysts' estimates of $5.42 billion.

McDonald's is scheduled to release its next earnings report on Jan. 24.