NEW YORK (TheStreet) -- How McDonald's (MCD) - Get Report will be affected by its exposure to Europe and the U.K. post Brexit is still up in the air, but likely it will retain negative consequences, BTIG's Peter Saleh told CNBC's Melissa Lee on "Power Lunch" Wednesday.
As the fast food giant celebrated the 45th anniversary of its Egg McMuffin breakfast sandwich today, the U.K.'s decision last week to leave the European Union continues to cast uncertainties over global markets. McDonald's has the highest exposure to Europe and the U.K. compared to other publicly traded fast food chains, Lee reported.
"Yeah it's definitely not a good sign. A lot of uncertainty. Nobody really knows how this is going to play out for the overall sales and demand, my guess is this could be a slight negative if anything at all," Saleh said.
However, Saleh's main concern is on the supply chain.
"We don't know what's going to happen with trade across borders, how they're going to get commodities in and out," he continued.
Morningstar's R.J. Hottovy agreed with Saleh. He sees risk more on the demand side and wonders what a U.K. and Europe recession could do to sales.
European sales make up about 20% to 30% of McDonald's revenues, according to Hottovy.
Meanwhile, McDonald's stock is higher by more than 20% over the past year, driven in part by the introduction of its all-day breakfast menu. However, come October, the one year anniversary of McDonald's first introducing the all-day breakfast, the company will face tough comparisons, Lee commented.
"Correct. Anytime you have success, you're going to face that the next year. But look, the breakfast program was a limited number of menu items, it wasn't the whole breakfast lineup so I think they can add more to it, they can change some things out, they can bring in some limited time offers. I think they can create some more buzz around breakfast all day," Saleh, who has a 'buy' rating on the stock, noted.
Hottovy admitted the company is in a "better place than it was a year ago" but he predicts the tough comparisons will be "too much for the markets to overlook." He has a 'hold' rating on McDonald's stock.
Shares of McDonald's are rising by 0.71% to $119.34 late this afternoon.
Separately, TheStreet Ratings rated McDonald's as a "buy" with a score of B.
This is driven by a few notable strengths, which 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. TheStreet Ratings feels 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
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.