McDonald's can redeem itself believes Deutsche Bank
According to a recent report published by Deutsche Bank, the company which does coverage on various firms recently targeted the fast-food giant, McDonald's Corporation. The bank is relatively optimistic about the future of this company and has thus given McDonald's stocks a “Buy” rating along with an average price target of $120. Moreover, they also believe that the company has a potential to experience a 24 percent upside considering the current trading price.
Karen Short, a renowned analyst stated that several investor’s believe that McDonald’s restaurant “arches are broken” but according to the company, the fast food behemoth “remains an iconic global and fixable brand.” Mr. Karen believes that the company has immense potential to redeem its position under the able leadership of the new chief executive officer Mr. Steve Easterbrook.
According to consensus, the company has been missing on earnings estimates since the past five consecutive quarters where their sales have been staggering at a steady pace. However, the strategy implemented by Mr. Easterbrook is extremely effective and can change the game for them once again. According to the analysts, the company is embracing a cultural change that allows them to question the “once off-limit strategies” with the power to get rid of the sacred goat ideology. This is a major breakthrough which will help the company to innovate and come up with new technologies that can result in efficiency.
Recently Mr, Steve Easterbrook came up with a video that dealt with the company’s upcoming plans in which he wishes to cut down on the long tiers of management and start focusing on ways that can drive customer satisfaction. He understands that the company has been dealing with several shortcomings and his agenda is to “We need to execute fewer things better,” as mentioned in the video.
Apart from this the company has plans to franchise almost 3500 outlets by F18. So once they are successful in doing so than 90% of the total outlets will be franchised. The Deutsche Bank analyst considers this a well thought out plan by Mr. Steve Easterbrook that will help the shareholders to a raise in capital return,
Despite Deutsche Bank is extremely positive about McDonald’s performance but even then the company needs to take several major steps to fight back. Mr. Easterbrook has taken several initiatives that have proved fruitful, but a lot more needs to be done so that they can attain stability once again.
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