McDonald’s (MCD) is scheduled to report results of its second quarter before the market open on Wednesday, July 28, with a conference call scheduled for 8:30 am ET. What to watch: 1. GUIDANCE: When McDonald’s reported its first quarter earnings results in April, management said the company expects 2021 systemwide sales growth, in constant currencies, in the mid-teens, and expects net restaurant unit expansion to contribute about 1% to 2021 systemwide sales growth. They also said they expect operating margin percent to be in the low-to-mid 40% range, and expect full year 2021 selling, general and administrative expenses of approximately 2.4% of systemwide sales. Additionally, the company expects the effective income tax rate for the full year 2021 to be in the 21%-23% range and sees 2021 capital expenditures to be approximately $2.3B, about half of which will be directed towards new unit expansion across the U.S. and International Operated Markets. 2. WAGE HIKES: In May, McDonald’s announced that it would be raising hourly wages for more than 36,500 employees at McDonald’s-owned restaurants by an average of 10%. The company said these increases would be rolled out over the next several months and include shifting the entry level range for crew to at least $11-$17 an hour, and the starting range for shift managers to at least $15-$20 an hour based on restaurant location. 3. ANALYSTS BULLISH: On July 26, Guggenheim analyst Gregory Francfort initiated coverage of McDonald’s with a Buy rating and $270 price target. The analyst also named the stock his Best Idea in the group. Francfort contended that the company’s international market recovery is being underappreciated by the stock price, and he expects investors to rotate into McDonald’s as the Street raises estimates and U.S. comps continue to perform well. On July 20, UBS analyst Dennis Geiger said that McDonald’s shares have further share upside from here, supported by a highly visible catalyst path and compelling multiyear growth trajectory. The analyst added that franchisee checks suggest continued U.S. comp momentum through Q2 and into Q3. The analyst made no change to his Buy rating or $260 price target. On July 16, Wedbush analyst Nick Setyan raised the firm’s price target on McDonald’s to $265 from $260 and kept an Outperform rating on the shares. The analyst believes the company’s U.S. same-store-sales growth is likely to exceed the Q2 consensus estimate of 23.5% based on channel checks. He increased his Q2 SSS growth estimate to 25% from 22%. McDonald’s SSS growth drivers include ongoing menu innovation, continued growth in marketing spend and increasing digital/delivery adoption, Setyan said.