Where Will McDonald’s Go Next?

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With shares of McDonald’s (NYSE:MCD) trading around $100, is MCD an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

McDonald’s franchises and operates McDonald’s restaurants in the United States, Europe, Asia Pacific, the Middle East, Africa, Canada, and Latin America — so just about every part of the world. Its restaurants offer various food items, soft drinks, coffee, and other beverages, as well as breakfast menus. The products provided by McDonald’s fulfill cravings at competitive prices in convenient locations worldwide. The McDonald’s craze shows no signs of slowing, so the company has continued its expansion to just about every nation on the globe. As consumers continue to enjoy McDonald’s products, look for it to see rising profits.

McDonald’s stock lost 0.5 percent to $100.53 on Wednesday, and has slipped 0.8 percent since the end of April, after running up 7.7 percent over the previous three months. Meanwhile, shares of rivals Wendy’s (NASDAQ:WEN) have gained 2.5 percent since the end of April, Burger King (NYSE:BKW) has advanced 3.4 percent and Jack in the Box (NASDAQ:JACK) have rallied 12 percent. And while it’s a stretch to think of McDonald’s burgers as gourmet, Red Robin Gourmet Burgers (NASDAQ:RRGB) have climbed 6.4 percent in two months. The latest Consumer Reports survey showed that of all the major U.S. burger chains, McDonald’s hamburgers were the worst tasting. The results are based on responses from 32,405 subscribers to Consumer Reports, and more than 96,200 dining experiences at 65 fast-food and fast-casual chains. So it’s no surprise that McDonald’s U.S. same-store sales fell 1 percent in May from a year ago, were flat in April and declined 1.7 percent in the first-quarter. “More and more, food quality — not just low price — is emerging as a deciding factor for many Americans when choosing where to spend their dining dollars,” said Tod Marks, senior projects editor at Consumer Reports.

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