After spending almost four years being bearish on McDonald’s, Hedgeye Managing Director and Restaurants Sector Head Howard Penney has turned positive on shares of MCD.
Penney recently presented his granular Best Long Idea Black Book outlining his bullish case for the company. His bullish call is predicated on three key points:
- The worst is behind us with a favorable risk/reward setup and a plan in place, now it’s all about execution;
- MCD is putting the customer first by optimizing the menu, decreasing the number of items, improving products, adjusting pricing, and adding new technology to enhance the customer experience
- MCD is lowering the cost structure through a number of key initiatives that will start hitting the P&L in 3Q15 at the same time sales driven initiatives hit the top-line.
Penney sees approximately 15%-30% upside in McDonald’s from here.
***If you’re an institutional investor and would like to see the MCD Black Book from July 10th or any other additional research from Howard please email sales@hedgeye.com