What's McDonald's (MCD) - Get Report going to do next? Offer Big Macs for breakfast?

The fast food chain has been dining out on the improvements served up by Steve Easterbrook, the CEO installed in first quarter 2015. It didn't take him long to arrest a three year sales decline. By the third quarter of last year, same store sales comparisons turned positive.

Easterbrook has implemented a number of changes, but none of them compares -- in terms of notoriety, if not impact -- with the implementation of breakfast all day. (The all day breakfast menu, introduced last fall, boosted sales by 2.5%.)

The question is: what does McDonald's do next? Breakfast all day -- the chance to get an Egg McMuffin at three in the afternoon -- was something that customers had militated for for years. Easterbrook, unlike his predecessor CEOs who resisted the consumer demand, relented.

But that could prove to have been the last bullet in the cartridge.

McDonald's shares, down 2% Wednesday following some critical comments from Nomura Securities, have pulled back 9% from its May 10 highs at nearly $132, an all time high for the stock. So which way does the stock go from here?

Some insights come July 26, when McDonald's unveils its second quarter numbers. Analysts are calling for $1.39 in EPS, with $6.3 billion in revenues. Nomura's Mark Kalinowski, who cut the firm's rating on McDonald's to neutral from buy, said he anticipated same store sales growth to slow in the period. (Remember he's saying "growth" slows, not actual sales.)

Otherwise, Wall Street hasn't adjusted its expectations for McDonald's performance this year. All three of the remaining quarters are expected to show higher profits than the year earlier period. McDonald's could be setting up for a fall. 

Think how tough that gets by the fourth quarter of this year. Last year's fourth quarter same stores sales leaped 5.7%, the best performance in 15 quarters.

Arguably, unveiling the all day breakfast was the biggest innovation for McDonald's since the introduction of the Big Mac. That was in 1968. Do you think McDonald's has another game changer in the works for later this year?

Sure, McDonald's has been doing a number of things to change the perception of food quality at its 14,000 U.S. locations. It's upgraded its salads. Pursued preservative free McNuggets. It's experimenting with fresh beef, not frozen, in some outlets in Dallas. (No word on whether that innovation will be rolled out nationally.) It recently introduced a new sriracha-based sauce. (Sure, that seems as contemporary as kale, but Goliaths move slowly.)

And the changes are not just cosmetic. From a corporate perspective, McDonald's is making some dramatic moves, including demonstrating that it's becoming more shareholder friendly. In November, it added $10 billion to its three year shareholder return plan, which now amounts to $30 billion through 2016, according to S&P. Incremental debt is funding the vast majority of the increase.

It's also pursuing an ambitious refranchising initiative. By year end 2018, it plans to turn 4000 company owned stores into franchised operations, a move that will take its franchising level to 95% of McDonald's locations from the current 82%.

Plans to sell its China operations are in the works, and reportedly have been met with strong interest. News reports have said six bidders, including several prominent private equity firms, have lined up to post bids for the assets.

But at the end of the day, McDonald's is going to trade - as it has traded for the last year - on product innovations. All day breakfast, while it seemed like a no-brainer for the longest time, proved to be a game changer. What, though, is left, especially as it heads into that year end tough same store sales comps? The resuscitation of the Monopoly promotion? Sure, that'll move the needle. But how much? Its Olympic sponsorship? Well, it will get the business some eyeballs of television viewers. To what extent does that turn into sales?

What about tweaking the baronial Big Mac? That's in the works, too, with McDonald's test marketing the Grand Mac, with a third pound of beef instead of the conventional fifth, and the Mac Jr., with a single patty.

That all seems like work on the margins, not at the heart. And at $120 a share, it's trading at a 24% premium to where it was late last summer, before the sales spike of all day McMuffins started to show.

By the way, McDonald's is now toasting the English muffins with butter, rather than margarine, a move that was more difficult than switching products in your own kitchen. (Unless you're somehow warehousing the 2.4 million pounds of butter that the McDonald's system demands.) McDonald's gets some points for improving margins even as labor costs have risen sharply. But it gets demerits for stubbing its toe with its value menu promotions earlier this year. Remember when the 2 for $2 became the 2 for $5 campaign?

But without a new food product to flog - and it has to be a substantial one, not like the mac 'n cheese coated with Cheetos flavor rolled out by Burger King - McDonald's is just a pricey stock, at 24 times earnings, without a needed boost to sales.

Big Macs for breakfast, anyone?