McDonald's: The Earnings Bounce Is Pricing In A Turnaround That Hasn't Happened Yet

What happened: McDonald's ($MCD) reported third-quarter adjusted EPS up 11% and operating income up 7%, while its U.S. business declined 0.2%. A Seeking Alpha analyst rates the stock Sell at $280. Key numbers: Adjusted EPS +11%, operating income +7%, U.S. comparable sales -0.2%, Sell rating at $280, fair value near $210, NEXT plan targets 50,000 locations. Why it matters: The analyst argues higher check sizes failed to offset falling U.S. visits, and that expansion has not translated into higher free cash flow, making the current valuation difficult to justify.

McDonald's ($MCD) reported third-quarter adjusted EPS up 11% and operating income up 7%, while its U.S. business declined 0.2%. A Seeking Alpha analyst rates the stock Sell at $280.

The analyst argues higher check sizes failed to offset falling U.S. visits, and that expansion has not translated into higher free cash flow, making the current valuation difficult to justify.