Stock price when the opinion was issued
Was downgraded last Friday and today over fears they won't meet expectations this quarter, including disappointment over MCD's new chicken strips dish, that it won't turn things around. Rather, customer prefer heavily breaded chicken and the find these strips ugly. However, history says it has never paid to downgrade MCD. It's the king, offering good value and is highly well-run. The CEO will figure it out.
MCD reported an E. coli outbreak from its quarter pounder burger across 10 US states. The outbreak started between late September and mid-October. MCD has temporarily stopped using certain ingredients in affected areas. The stock fell sharply the day following the news, and it is currently down 5% (an $11B market cap loss) from just prior to the news.
We do not feel that the outbreak warrants an $11B loss to the stock, particularly over the long-term, but the stock has run up nicely over the past few months, and this could partially be profit-taking in conjunction with the news release. We would prefer to see the stock find a floor before entering a position, but over the long-term, we would be comfortable holding the name.
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