UBS downgrades McDonald's on slowing sales, valuation

Ronald McDonald balloon is seen at the 90th Annual Macy's Thanksgiving Day Parade on November 24, 2016 in New York City.
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UBS reduced its rating on McDonald's to neutral from buy, saying the restaurant chain will have a difficult time growing sales in the coming quarters.

"Shares appear to largely reflect improved fundamentals and refranchising benefits," analyst Dennis Geiger wrote in a note to clients Thursday. "Despite confidence in the long-term outlook, we're lowering our rating ... we'll likely wait for greater conviction into traffic and sales acceleration and more upside to consensus estimates before revisiting our recommendation."