Wall Street skeptic says McDonald's is back

A prominent McDonald's analyst is telling his clients that the fast-food giant has regained part of its "mojo."

A rosier outlook prompted Nomura analyst Mark Kalinowski to upgrade McDonald's shares to a "buy" rating from "neutral" and place a $135 price target, a 14.3 percent premium to Thursday's closing price. Kalinowski is well known for releasing a quarterly survey of franchisees, some of whom have given scathing critiques of the chain in the past.

A McDonald's Big Mac, their signature sandwich is held up near the golden arches in Centerville, Virginia.
Paul J. Richards | AFP | Getty Images

Nomura expects McDonald's U.S. same-store sales growth to have hit 3.5 percent in the recently ended fourth quarter. That would mark the sharpest rise in 14 quarters.

"[O]ur channel checks suggest that in the short term, McDonald's has regained at least some of its mojo — and impressively, it has done so at a time in which most major segments of the domestic restaurant industry are enduring sequential deceleration in same-store sales trends," Kalinowski wrote in the new report.

The restaurant's all-day breakfast initiative, which officially kicked off in early October, helped fuel sales growth during the quarter, the firm predicted.

Investors will have to wait until Jan. 25 to see just how much the extended breakfast hours impacted McDonald's sales. Leading up to the eagerly anticipated report, most of Wall Street analysts recommend sitting on the sidelines. About 55 percent of sell-site analysts have a "hold" rating, according to FactSet.