CIBC World is cautious on McDonald's (MCD).
Analyst John Glass says McDonald's management may guide down the Street's estimates by 5% during a Sept. 17 conference call. He thinks recently announced strategy changes are likely to face capital constraints as McDonald's invests up to $1 billion to upgrade its domestic store base.
Glass says the company's need to pare back its share repurchase program and/or new store openings may result in reduced earnings per share growth. He says shares could see downside to $18-$19, based on historical trough valuations. Glass sees $1.49 2002 earnings per share and $1.63 for 2003. He rates the restaurant sector as underperform.