McDonald’s Corporation (NYSE:MCD) has been experiencing the benefits of a long term breakout and the last day’s gain of 1.59% is just an extension of that. The volume of the day at 11.6 million against the daily average of 7.7 million was indicative of the huge interest the investors have been showing in the stock in the last few days. The width of the long term range, as seen from the chart attached, can be taken roughly as $13. Adding that to the breakout level of $102, we can get a rough target of $115 in the next few weeks.
It’s easy to scorn McDonald’s Corporation (NYSE:MCD) for the many problems it has gone through. With its comparable-restaurant sales having hurt for a long period, the fast food-chain appeared set to fall prey to increased competition, both from fast-casual peers selling higher-quality food products and within the fast-food segment.
The change
Recently, McDonald’s Corporation has investors delighted again, with its recent measure to sell all-day breakfast, expecting to cater to a new group of prospective customers. The company has started to abridge its menu, a choice that should help its franchisees save funds and alleviate some of their annoyance with the parent firm.
By refocusing on local operations, McDonald’s expects to re-instill the confidence that investors had in the stock some time ago. With 14% average yearly returns during the past thirty years, and a existing dividend surpassing 3%, the fast-food chain firm has a shot at providing investors a nice combination of future growth and income.
The performance
Recently, McDonald’s reported 3Q2015 results wherein it stated that in the U.S. 3Q comparable sales surged 0.9%. It marks the division’s first quarterly comparable sales jump in past two years. The launch of the new sandwich and breakfast, including the start of the classic recipe ingredients for iconic Egg McMuffin, resulted in the segment’s strong performance.
Operating income in 3Q dropped 1% following incremental investment in benefits and wages for all eligible firm-operated restaurant staff, which is planned to enhance employer brand and improve restaurant performance. Moving forward, reestablishing customer traffic will be a top priority for the company.
The management speaks
Steve Easterbrook, the CEO of McDonald’s said that customers have more choices than before where to dine and company’s operational growth-driven turnaround focuses on wooing customers in the most popular segments like great-tasting, convenience, value and high-quality food. The management is encouraged by remarkable operating performance in 3Q with positive comparable sales in all markets.
