StockCall Analysis on McDonald's and Burger King: 2013 Outlook Looks Mixed

  StockCall Analysis on McDonald's and Burger King: 2013 Outlook Looks Mixed

  PR Newswire

  LONDON, January 28, 2013

LONDON, January 28, 2013 /PRNewswire/ --

In the last few weeks, economic data out of U.S. and China has been
encouraging. This augurs well for restaurant companies such as McDonald's
Corp. (NYSE: MCD) and Burger King Worldwide Inc. (NYSE: BKW). However,
McDonald's outlook suggests that the restaurant industry could see tough times
ahead. StockCall professionals have finished the first round of technical
analysis on these two restaurant stocks. Sign up now and download the free
reports at

http://www.stockcall.com/research  

McDonald's Q4 Earnings Beat Expectations

Earlier this week, the world's largest restaurant chain reported
better-than-expected earnings for the fourth quarter. The company reported
fourth quarter profit of $1.4 billion, or $1.38 per share, compared to $1.38
billion, or $1.33 per share seen in the same period in the previous year. Our
technical analysis report on McDonald's is accessible at

http://www.StockCall.com/MCD012813.pdf 

McDonald's revenue in the fourth quarter revenue rose 2% to $6.95 billion as
sales in the U.S. rebounded. Comparable-store sales in the U.S. rose 0.3%.
However, weakness in Europe and Japan weighed on the company's results.
McDonald's global comparable sales rose only 0.1%, mainly due to weakness in
Europe and Japan.

Outlook a Concern for Restaurant Industry

McDonald's gave a disappointing outlook last week due to global economic
uncertainty. The company's weak outlook suggests that the restaurant industry
is likely to face tough times ahead.

Don Thompson, CEO of McDonald's, said that economic volatility continues to
hurt consumer sentiment and spending and more specifically growth in the
informal eating-out industry has been relatively flat to declining around the
world. Thompson added that the trend is expected to continue.

McDonald's said that its same-store sales in the month of January are expected
to be negative.

With the world's largest restaurant chain expecting weakness, the prospects
for the restaurant industry do not bode well for the near-term.

But Global Economy is Showing Signs of Improvement

The restaurant industry, however, can take heart from the fact that the global
economy is showing signs of improvement. Recent economic data in the U.S.,
especially from the labor market, has been encouraging. Last week, the
University of Michigan's consumer sentiment index fell unexpectedly. Apart
from that though, the U.S. economy continues to show signs of recovery.

China is also seeing a rebound. Last week, a report from the National Bureau
of Statistics showed that the Chinese economy grew 7.9% in the fourth quarter
of 2012. Latest manufacturing data from the world's second largest economy has
also been encouraging.

Europe and Japan are the weakest links for the global restaurant industry.
However, Japanese officials have stepped up their efforts to boost economic
growth in the country. The Bank of Japan this week unveiled additional
monetary easing measures, which are expected to stimulate the Japanese
economy. Meanwhile, in Europe, concerns over the region's debt crisis are
continuing to ease.

Banking on New Products

Although the global economic environment is expected to continue to improve,
restaurant industry could see weakness in the near-term. Companies such as
McDonald's and Burger King Worldwide Inc. [ Free Technical Analysis Report on
BKW ] ^(1) , however, are rolling out new products to boost sales. Earlier
this month, Burger King had announced the rollout of the all new Chicken
Nuggets and six more limited-time menu items in restaurants across the U.S.

Footer:

1.Burger King Worldwide Inc. Technical Analysis [
    http://www.StockCall.com/BurgerKingWorldwideInc012813.pdf ]

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