McDonald's

(MCD) - Get Report

sizzled to a 16-month high Tuesday amid optimism about the fast-food company's October same-store sales report.

Paul Westra, an analyst at SG Cowen, upgraded McDonald's to strong buy from outperform, noting that October U.S. comps -- to be released on Friday -- could be up 10%. "Strong U.S. momentum and an improved European outlook prompt an upgrade," he said, in a research note.

On the news, the stock finished ahead 72 cents, or 2.8%, to $26.11 -- its best level since July 2002.

Hype for McDonald's has been building all year, as the company's turnaround has grabbed hold. The restaurant operator reported a 12.5% rise in third-quarter earnings, as U.S. sales improved.

"After reporting 15 consecutive months of negative results, domestic comps turned positive in April and have averaged 8.4% over the past six months," Westra said. "Though Europe and Asia-Pacific-Middle East continue to turn in negative results, worldwide has been positive for five straight months."

According to Westra, McDonald's has a "significant opportunity" to make incremental gains in Europe, where same-store sales have been negative in the last 12 reporting periods.

On Tuesday, McDonald's announced management changes at its international operations. Among them, the company appointed a new head of Japan operations, where sales have been particularly weak.