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McDonald's Corp.

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McDonald’s impressive earnings surprise history, various sales and digital initiatives as well as positive comparable sales have helped the stock to outperform its industry in the past six months. Also, earning estimate for 2018 have increased over the past month. Furthermore, increased focus on delivery and accelerated deployment of Experience of the Future restaurants in the United States should boost its performance. These apart, the company’s efforts to drive growth in International Lead & High Growth Markets bode well. In fact, global comps at McDonald’s have been positive over the trailing 13 quarters. Yet, high labor costs and currency headwinds remain major concerns. Moreover, revenues have been under pressure for quite some time due to strategic refranchising initiatives. Even its heightened focus on refranchising should cut the capital requirements and facilitate EPS growth.

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