McDonald’s Corporation (NYSE:MCD)’s poor run in the market continues to be a point of concern to investors as it is occurring at a time when gas prices are trading at an all-time low. A decline in gas prices was expected to accord customers with more cash that they could have used in the company’s food stores. During an Interview on CNBC Morningstar analyst, R.J Hottovy, reiterated that aggressive actions were highly needed to prevent a further slump in the company’s brand as competition continues to bite from all corners.
The giant food store has been struggling with young customers leaving it for other options that can accord quality service and a good line of menu. McDonald’s Corporation (NYSE:MCD) has already warned that the strengthening of the U.S dollar will likely affect its earnings heading into the close of the year.
“I think there are so many other options right now that are more compelling in the restaurant space, and it is up to McDonald’s to introduce some much more innovative platform. Take a holistic look at its whole platform right now,” said Mr. Hottovy
McDonald’s Corporation (NYSE:MCD) has already stated that it is set to lose between $7-$9 cents a share as a result of the strengthening of the Dollar. Marketing remains key if McDonald’s is to come out of the current mess stronger than before according Hottovy. The giant food store has lost a lot in the food space attributed to its sluggishness in incorporating modern technology as well as carrying out aggressive marketing campaigns geared towards attracting new and more customers.
“Foreign currency given their exposure outside the U.S and when you have a strengthening U.S dollar that is going to weaken the results here at home when they are translated into U.S dollar and so I think that is one you have to look on the EPS line,” said Mr. Hottovy.
Hottovy maintains that McDonald’s Corporation (NYSE:MCD) stock remains fairly valued at the current market levels with things not expected to change overnight for the better. Going long on McDonald’s Corporation (NYSE:MCD)’ stock as a long term investment remains a perfect play in this case according to the analyst. A dividend yield of 4% still makes the stock exciting despite underperforming for the better part of the year.
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