McDonald’s bulls think menu innovation will boost the restaurant stock

Goldman Sachs upgraded McDonald’s (NYSE:MCD) to a Buy rating on Thursday after having the restaurant stock slotted at Neutral.

Analyst Christine Cho and her team said that while there have been some bumps in the road in the last few quarters, the firm believes McDonald’s (NYSE:MCD) ultimately has the scale/marketing/digital advantage to successfully navigate through the environment.

McDonald’s (MCD) management has firmly committed to market share gains through product and marketing innovation, including the return of snack wraps and the addition of a daily double burger to the McValue platform in the U.S., among other recent menu additions.

“Given its size and scale, we see MCD as a likely beneficiary, poised to take advantage of its marketing power to elevate consumer awareness around new menu offerings generating traffic/check growth, coupled with accelerating global unit development to drive top-line growth. We have begun to see some early signs that MCD’s new product offerings and value platform are working, as the brand has maintained traffic growth above peer levels and is taking market share from the other large burger brands.”

Goldman Sachs set a 12-month price target on McDonald’s (MCD) of $345. Shares of McDonald’s (MCD) rose 2.2% in late Thursday morning amid buzz in the U.S. over the return of the Snack Wrap menu item.