McDonald's (MCD) - Get Report shares edged higher Friday, helped in part by a Longbow Research upgrade for the world's biggest restaurant group buy from neutral just days after the surprise departure of CEO Steve Easterbrook.
Longbow analyst Alton Stump boosted his rating on McDonald's stock to 'neutral' from 'buy', with a price target of $227 a share, noting that while McDonald's will face more challenging same-store sales growth comparisons next year, new CEO Chris Kempczinski's leadership, as well as more locations offering delivery, recent and upcoming mobile technology improvements and additional remodels can drive comparable growth of between 3.5% and 4% in 2020.
McDonald's shares were marked 0.22% higher in early Friday trading to change hands at $193.51 each, a move that pegs that stock at essentially the same level it traded at prior to Easterbrook's departure on Sunday evening after it was revealed he was involved in a relationship with an employee.
Easterbrook admitted he had made a "mistake" in pursuing a relationship with a colleague which, while consensual, violated company policy.
McDonald shares took a beating in the days following Easterbrook's departure, which was quickly followed by the resignation of David Fairhurst, McDonald's head of human resources. The stock fell to its lowest level in more than six months on Monday as the company lost $4 billion in market value.
Stump said Kempczinski has played an integral role alongside Easterbrook in driving the company's "impressive" domestic same-store sales recovery and he believes McDonald's "is in good hands."
Last month McDonald's reported weaker-than-expected third quarter earnings linked in part to softness in its domestic U.S. business, where comparable sales, which rose 4.8% from last year, were down from the 5.7% pace reported in July.
Kempczinski, former president of McDonald's USA, has also been elected to the board. He joined the company in 2015, Kempczinski had been responsible for McDonald's business operations of roughly 14,000 U.S. restaurants.