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McDonald's hits fresh all-time highs because of this key factor, analyst says

McDonald's trading at all-time highs
McDonald's trading at all-time highs

McDonald's shares hit an all-time intraday high Tuesday in large part because of its all-day breakfast menu, Barclays restaurant analyst Jeffrey Bernstein said.

The stock traded as high as $131.96 and closed at $131.60, up 0.6 percent.

All-day breakfast has been the major component lifting the previously underperforming chain, but it's not the only component, Bernstein told CNBC's "Squawk on the Street." New products, like bratwurst in Milwaukee and garlic fries in San Francisco, have caught customer attention. The ongoing transition to cage-free eggs and improvement of protein quality have also helped to sustain the momentum.

The fast-food giant's stock has also benefited from solid quarterly results. McDonald's last month reported first-quarter earnings of $1.23 per share, on $5.9 billion in revenue versus Reuters' estimate of $1.16 per share on $5.83 billion in revenue.

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McDonald's will continue to grow, Bernstein added. "I don't expect it to be necessarily an investor's best performer, but in this environment, it's large, liquid with a healthy dividend, and I think the fundamental momentum is there. I think you'll see comps remain strong in the near term. I think there's an earnings upside."

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"The big pushback we hear from investors other than the fact the stocks had a big move is that once you get to the fourth quarter of this year you start to lap those very strong sales numbers and people are often spooked when you start to face those more difficult comparisons," he said.

Bernstein said McDonald's shouldn't rest on its laurels just yet. While the burger chain is improving, other competitors aren't too far behind. Bernstein listed Wendy's, Burger King, and Sonic as other quick-service restaurants that are performing well.

Bernstein singled out Wendy's, pointing to the Ohio-based chain's move toward higher-quality ingredients to offer menu items that seem to be healthier, differentiating itself from McDonald's.

Wendy's is scheduled to report quarterly earnings before Wednesday's opening bell.