Fast-food giant McDonald's warned on Wednesday that it expects global sales to be lower this month — a prediction that one analyst said investors should be eyeing along with clues from its production pipeline to gauge whether the company can get back on track.
"On a two-year comp basis, that does represent a pretty sharp deceleration from what we saw in December," said R.J. Hottovy, a senior restaurant analyst at Morningstar. "But peeling back the numbers a little bit more, I think that has to do more with the emphasis on the dollar menu translating into a lower transaction size that it does indicate any real degradation in terms of traffic, but it is something to keep an eye on."
McDonald's finished the holiday quarter with a 0.3-percent rise in same-store sales in the U.S., a 0.6-percent drop in Europe and a 1.7 percent decrease in its Asia-Pacific/Mideast/Africa region.
The company faces a number of challenges, including smaller paychecks for most of its customers due to the payroll tax cut and increased competition from fast-food chains like Burger King Worldwide and Yum Brands' Taco Bell that have introduced new U.S. menus.
"Obviously the company is facing a lot more competition from some resurgent competitors in the form of Burger King and Wendy's as well as some of the specialty chains, such as Five Guys," Hottovy said. "So you really have to watch what they have in the product pipeline and if they can turn this around."
McDonald's increased emphasis on its dollar menu has pressured the company's profitability. After a disappointing 2012, Hottovy told CNBC's "Squawk Box," the market is looking for strength in the company's product pipeline.
"I think that's really the key thing to look for — that's going to be what the catalyst to drive the stock over the next couple months is," he said.
In a separate interview, Nicole Miller Regan, a senior analyst at Piper Jaffray, called McDonald's quarterly results "OK," adding that January is a little bit of a concern.
"I think that there is a defensive play here, to some degree," she said. "We're seeing a lot of investors interested in the dividend stocks within the restaurant sector. That being said, if you can take the risk and you're looking for the beta, you know, competition is fierce. And as big and as great as McDonald's is, they can't really offset the macro and the competition, and I kind of like what Burger King is doing right now with their buy one, get one free promotions."
Regan has an "overweight" rating on McDonald's stock and a $95 price target along with an "overweight" rating on Burger King shares. She added that she would definitely bet on McDonald's rather than against the stock.
"I do think they are different investment profiles," she said. "Again, McDonald's is a safe- haven defense play. Burger King is very contrarian, very misunderstood and not well covered."
—By CNBC's Katie Little; Follow her on Twitter
Piper Jaffray makes a market in the securities of McDonald's. Piper Jaffray will buy and sell McDonald's securities on a principal basis.