🍟 Lovin’ It Yet?

The ubiquitous Golden Arches is poised for growth as the global economy inches towards post-pandemic recovery

Hey Global Investor, here’s what you need to know before the US markets open.

Market Snapshot 📈

S&P 500 (Monday Close) 3,647.49 −15.97 (0.44%)

NASDAQ (Monday Close) 12,440.04 +62.17 (0.50%)

FTSE 100 (5 PM IST) 6523.39 -8.44 (0.12%)

NIFTY 50 (Today’s Close) 13,567.85 +9.70 (0.072%)

USDINR (5 PM IST) 73.56 (1 Year +4.01%)

🍟 Lovin’ It Yet?

The ubiquitous Golden Arches is poised for growth as the global economy inches towards post-pandemic recovery.

Background: McDonald’s, like other restaurant chains, reeled under the impact of COVID-19, with same-store sales dropping 24% in Q2. Breakfast was hit the most as lockdown and remote working impacted daily commuters and thus, demand.

Q3 was much better in comparison. Same-store sales were down but improving month-over-month, with dinner purchases recovering the most. With smaller and independent restaurants closing down during the pandemic, McDonald’s had a little more leeway.

What Happened? McDonald’s has seen a faster recovery than its peers. The collaboration with Grammy-nominated rapper Travis Scott, the relaunch of McRib this month, the upcoming limited-time launch of spicy chicken nuggets in February, and a new chicken sandwich on offer in March, have all created a positive buzz among consumers.

The company has also been pushing digital experience and promoting exclusive deals on its app. Holiday promotions and free giveaways are adding to the excitement. Add to it, the gradual reopening of the economy, and the fact that McDonald’s has delivered a 2.5% dividend yield puts its stock in the orbit of analysts who are equally excited about future prospects.

No surprise, therefore, that UBS has upgraded McDonald’s from neutral to buy and revised the price target from $230 to $240.

Market Reaction: McDonald’s stock is up 15% YTD. On Monday, the stock closed at $211.92, up 2%

Company Snapshot 📈

MCD $211.92 +4.16 (2.00%)

Analyst Rating (32 Analysts) BUY 78%, HOLD 22%, SELL 0%

Newsworthy 📰

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  • Spill Your Secrets: FTC orders tech giants to provide details of how they collect data, and what effects they have on children (FB +0.23%, TWTR +1.30%, AMZN +1.30%)
  • Later than Sooner: Google CEO delays office return to next September, but axes idea of permanent remote work (GOOG -1.22%)

Later Today 🕒

  • 7.00 PM IST: Import price index
  • 7.00 PM IST: Empire state index
  • Before Market Open: Granite Construction Inc Earnings (GVA)
  • After Market Close: Nordson Corp Earnings (NDSN)

Fun Fact of The Day 🌞

Badminton is the fastest racquet sport in the world—shuttles can reach speeds of over 200 miles per hour

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