With earnings season underway, the majority of companies have come in beating analyst estimates. However, some analysts say there's danger lurking in the next round of reports.
"The one that I'm really worried about is McDonald's," Erin Gibbs of S&P Capital IQ said Monday on CNBC's "Power Lunch." "They've had two years of lagging sales, they've implemented a lot of new strategies, and nothing has been able to gain foot [traffic] and turn around sales."
The company faces challenges from increasing wages and new market competitors such as Chipotle and Shake Shack. This year, McDonald's has explored adding kale, gouda cheese and sirloin beef in attempts to create a more sophisticated menu.
Gibbs also said a recent poll spelled trouble for the fast food restaurant, in which 29 franchisees gave the worst sales outlook since 2003. The survey was conducted by Janney Capital Markets, and found franchisees rated the company forecast at an average of 1.84 on a scale of 1 to 5.
Read MoreMcDonald's franchisees most pessimistic in a decade
"Even though it's a very small percentage of the franchisees, I think it really gives a good indication for what we might see during the earnings report on Thursday," Gibbs said.
Rich Ross of Evercore ISI, also on "Power Lunch," said Caterpillar is another stock to watch out for this week as it releases second-quarter earnings.
"This is a stock that takes its cues from three things: the emerging market, energy, metals. That's not a good three things to take your cues from," Ross said Monday.
According to Ross' chart, Caterpillar's stock has stayed at a consistent support level of about $70 to $80 for the past couple years. However, he said, turmoil in metals and energy markets could send the stock tumbling down.
"You've been moving sideways for four years, you've been holding that key support. But on a bad print, if you take out that critical support ... [there's] a lot of downside here in this name," he said.
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McDonald's and Caterpillar are both set to report earnings Thursday before the opening bell.
Analysts have an average hold rating on both companies, with a target price of $85.57 for Caterpillar and a target price of $103.58 for McDonald's.
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