Citi cuts McDonald's target, opens 'negative catalyst watch' - InvestingChannel

Citi cuts McDonald’s target, opens ‘negative catalyst watch’

Citi analyst Jon Tower lowered the firm’s price target on McDonald’s to $246 from $275 and keeps a Neutral rating on the shares. The analyst sees an “increasingly less favorable” risk/reward in McDonald’s shares, with currency and macro challenges in Europe “looming over” earnings estimates heading into Q3. Further, the stock’s valuation leaves “little room for shares to absorb negative estimate revisions,” Tower tells investors in a research note. He says McDonald’s U.S. same-store-sales would need to beat “already strong” expectations by a mid-single-digit percentage to offset marking to market for currency and even a low-single-digit decline in the Europe same-store-sales outlook. As such, he opened a “90-day negative catalyst watch” for McDonald’s shares.

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