McDonald's posted higher quarterly profit Friday, helped by strength in Europe and a small rise in December sales in the United States, where high unemployment and rampant discounting are straining results. David Palmer, senior restaurant analyst at UBS, shared his analysis.
“The good news for McDonald’s is that margins on the company stores are holding up very well, because the food costs are going down,” Palmer told CNBC.
“The topline’s not as good in the U.S. for sure, but they’re printing pretty good earnings, with a little bit of help from currencies and the European same-store sales holding up," he continued.
Palmer said McDonald’s performance is much better compared to their competitors. He has a “buy” rating and has a $67 price target on the firm.
- Watch Palmer's Previous Appearance on CNBC (Nov. 9, 2009)
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McDonald's Competes With:
Burger King
Yum! Brands
Wendy's/Arby's
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Disclosures:
Palmer has clients who own shares of MCD. Within the past 12 months, UBS has provided McDonald’s with non-investment banking securities-related services.
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