24/7 Wall St. » McDonald’s

Dunkin’ Donuts Kicks Starbucks (SBUX) While It Is Down

247wallst — Mon, 08 Sep 2008 17:11:50 +0000

Dunkin’ Donuts plans to double its US stores to 15,000 by 2020. The management at the inexpensive coffee shop chain must have a crystal ball or a very good psychic. Not many companies know their plans so far out.

Dunkin’ Donuts appears to think it can join the ranks of all the other companies trying to take business from Starbucks (SBUX). McDonald’s (MCD) has been at the top of that list, and now they won’t be so lonely.

According to Reuters, Dunkin’ "gets around 65 percent of sales from beverages. Over the last few years, it has added espressos, lattes and cappuccinos that cost roughly $1 less than at Starbucks."

At some point the market for coffee will become so crowded that retail chains will have to give away the java and hope to sell breakfast food to bring in revenue.

Douglas A. McIntyre

Can Yum! Brands Continue Its Earnings Surge? (YUM, MCD)

247wallst — Sat, 02 Feb 2008 10:04:29 +0000

On Monday, we’ll get to see earnings out of Yum! Brands Inc. (NYSE:YUM). The estimates from First Call for the fast food franchise giant are $0.42 EPS on $3.14 billion in revenues. Estimates for next quarter are $0.42 EPS and its fiscal 2008 estimates are $1.87 EPS on $10.65 billion in revenues.

As this owns KFC, Pizza Hut, Taco Bell, and more, this one is sort of a defensive stock among restaurant stocks. It has also been doing so well overseas, particularly growing in China, that the company has been able to weather the U.S. storms. We even named this as one of our own "go-to defensive stocks for 2008" with a value eye when investors want to look for safer investing in an unsafe investing climate. When we printed that list we liked this one even more than the value and growth of McDonalds (NYSE: MCD), and we think it actually has a better growth story as well. This is also one of the key window dressing stocks used when fund managers need to show their positions.

Analysts have an average price target of almost $41.00, although we did just see a downgrade from "buy to hold" out of Deutsche Bank this week due to valuation premium to the market. If Friday’s closing prices are any indicator and if the earnings were coming out immediately, it appears that options traders would be pricing in a move of up to $1.30 to $1.40 in either direction.

Yum! Brands’ 52-week trading range is $27.50 to $40.60.

Jon C. Ogg
February 2, 2008

McDonalds Continues Its Gains (MCD)

247wallst — Fri, 12 Oct 2007 07:11:07 +0000

McDonald’s (NYSE:MCD) is on a mission. The company has just raised guidance yet again with projections of $0.83 EPS versus $0.77 estimates.

This does not include gains from the sale of Boston market but it does include currency gains that added $0.03 to operations and growth in other operating income added $0.02. Its US same-store-sales were up 3.5% in September, Europe up 5.7%, and Asia/Pacific/MiddleEast/Africa up 12%. Its system-wide sales in Spetember were up 11.5%, but noted as 7.2% in constant currency.

McDonald’s shares were originally up about 1.5% pre-market, but shares are up right at 1% now at $56.85 in pre-market activity.

Jon C. Ogg
October 12, 2007