McDonald's new burger, the Sriracha Big Mac as well as their Signature Crafted sandwiches have rose in popularity lately according to an analyst at Longbow Research. The small Wall Street firm raised their rating to neutral, predicting McDonalds would report sales above expectations. This caused McDonald's stock to increase 2.5% today. For reference, their stock is actually up 27% this year (S&P is up 12%), so the company has been having a pretty solid year.
Wall Street predicted about 3.4% increase in sales growth, however one analyst estimates 4 to 4.5%. McDonald's is moving towards "a less capital intensive, higher franchise model" which creates a more "predictable earnings stream," the analyst argued. Read more here.
- Have any of you tried the Sriracha Big Mac or their new sandwiches? Do you think the stock will continue to rise based on the hype?
- Why did the market react so heavily to one analyst changing their rating?
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