Global hamburger and fast food giant McDonald’s Corp. (MCD) got a boost this week from a team of analysts on the Street who foresee the company’s comp sales beating consensus estimates this quarter. (See also: Buy McDonald’s and Tech Before Dollar Enters Long Bear Market: Credit Suisse.)

On Thursday, Longbow Research lifted its rating on the Oak Brook, Ill.-based restaurant chain to buy from neutral, given the firm’s “latest positive checks and favorable short and long-term view of MCD’s fundamentals”. In particular, analyst Alton Stump says conversations with U.S. franchise owners reveal popularity of new menu items including a Sriracha Big Mac, beverage promotions and a line of Signature Crafted sandwiches.

In the third quarter, the Longbow analyst expects McDonald’s to post comparable sales growth between 4% to 4.5%, compared to his previous estimate at 3.5% and the Wall Street consensus at 3.4%.

'Turnaround Story'

“Beyond positive trends for the current quarter, we believe the shares of MCD deserve to trade above the company’s own historical multiples in light of its ongoing turnaround story both in the U.S. and international,” wrote Stump. The analyst set a $183 price target on MCD, or approximately 16.7% above current levels.  

“MCD's ongoing shift to a less capital intensive, higher franchised model should generate a more predictable earnings stream and accelerated free cash flow that warrant a higher multiple for the shares,” added Stump. (See also: Buy McDonald’s, Taco Bell on Weed Legalization?)

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