McDonald’s: A Golden Stock at its highest

Based on the company’s ability to outperform competitors in challenging environments & superior distribution network, McDonald’s stock has strong upside. Wells Fargo analysts wrote in a commentary that ‘’a hard landing for the economy has become our base case.’’ “The recent pop in the two-year Treasury yield above 3% is our catalyst, indicating a more hawkish Fed and continued risk aversion.”

“We believe the recession starts in the markets since the economy has the highest equity beta in decades—i.e., the stock sell-off weighs on sentiment, then discretionary spending, and ultimately the economy,” the analysts said. Since November 2019, the stock is up 34% compared to a 54% gain for the S&P 500. Despite underperforming the market, the stock is worth $310+/share today – a 26%+ upside. For your information, the stock outperformed some of its competitors, as Starbucks Corp. SBUX, -0.07% fell 0.07% to $72.31.
It is worth saying that with increased digital and delivery capabilities, McDonald’s has plenty of opportunities to improve.