McDonald's Corp (NYSE:MCD) was cited as the ‘favorite’ quick-service restaurant brand by 37% of respondents in a 2023 survey by the UBS Evidence Lab, analysts at the brokerage said as they retained their ‘Buy’ rating and $330 price target for the company.
Not only did McDonald’s beat its peers by a significant margin, the burger chain also scored more than 800 basis points higher than the 2022 survey, the UBS analysts said in a client note.
“Younger consumer respondents also highlighted MCD as a favorite brand, reflecting the brand's increasing appeal & relevance,” the analysts wrote.
“MCD outperformed across several key attributes, including: 'good value', 'fast service', and 'great tasting food’.”
The survey also indicated increased visit intent by the respondents over the next 12 months, with 26% of respondents saying they would visit more often and just 11% planning to visit less frequently. The net intent of +15% compared with +6% for McDonald’s peers, the analysts noted.
With investors focused on easing US sales trends at McDonald’s following a strong first quarter, the analysts said they expect underlying demand to remain largely resilient and market share gains to continue.
They also expect the brand to benefit from ‘trade down’ even in a more pressured spending environment, with compelling value and strategic initiatives across improved service, core menu, effective marketing, and digital gains to contribute to sales outperformance versus its peers.
“While shares have outperformed in recent years (~24x '24E EPS), we view MCD as a quality, defensive compounder and believe shares can continue to move higher given: global sales growth & resiliency, earnings upside, and a 2H investor day catalyst,” they concluded.
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