McDonald’s CEO firing: Wall Street analysts commentary : Here’s what 5 Wall Street firms are saying about..

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(*)(*)(**)(***)(****)(*****)Associated Press(******)(*******)(********)(*********)(**********)The ouster of McDonald’s (***********) CEO Steve Easterbrook(************) is sparking mixed reactions on Wall Street. (*************)(**************)(*********)(**********)Some analysts are standing by the fast-food giant and its remaining management team, but others fear the change will leave investors with greater uncertainty about the stock’s upside. (*************)(**************)(*********)(**********)Here’s what five analysts are saying about (***************) Easterbrook’s shocking departure(************) – and what it means for the future of the company. (*************)(**************)(*********)(**********)(****************)Visit the Business Insider homepage for more stories.(************)(*************)(**************)(*****************)(******************)(*******************)(**) McDonald’s CEO (***********) Steve Easterbrook’s(************) surprising exit from the fast-food giant is sparking mixed reactions on Wall Street. (*******)(**) Some analysts are sticking by McDonald’s and reiterating high price targets in anticipation of little change to the company’s long-term strategy of investing in technology and international markets.(*******)(**) Other Wall Street firms are concerned the abrupt leadership transition could hamper the stock price in the near term.(*******)(**) Investors appear to share similar worries about the sudden shake-up as well. McDonald’s (***************) shares traded(************) as much as 2% lower Monday morning after the news was released. (*******)(**) Easterbrook – who was fired over the weekend for having a relationship with a subordinate – has been credited with turning the struggling company around amid the shifting fast-food landscape. McDonald’s shares have gained (********************************************************)% since he took over as CEO in March (******************************************). (*******)(**) Easterbrook will be succeeded by McDonald’s USA President Chris Kempczinski, a familiar face for investors, according to Cowen analyst Andrew Charles. (*******)(**) Here’s what five Wall Street firms are saying about Easterbrook’s ouster – and what is means for the fast-food giant’s future: (*******)(******************)(*******************)(********************)(*********************)(**********************)(*********************)(**********************)(*)(***********************)Credit Suisse: “We view any material pullback in the stock around the CEO change as a buying opportunity.”(************************)(**)(*************************)(****)(*****)Reuters(******)(*******)(**)(**********)Price target: (*************)$(***************************************************)(*******)(**)(**********)Rating: (*************)Outperform(*******)(**) “Given MCD’s current global strength, deep bench and strong franchisee base, the management transition does not alter our positive view of the Company,” Credit Suisse analyst Lauren Silberman wrote in a note to clients Sunday. (*******)(**) Silberman added: “We view any material pullback in the stock around the CEO change as a buying opportunity.”(*******)(******************)(*******************)(********************)(*********************)(**********************)

(*********************)(**********************)(*)(**************************)Piper Jaffray: “Changes of this magnitude tend to be disruptive.”(************************)(**)(***************************)(****)(*****)Jeff Greenberg/Contributor/Getty Images(******)(*******)(**)(**********)Price target: (*************)Cut to $(*******************************************************), down from $(*****************************************************)(*******)(**)(**********)Rating: (*************)Downgraded to “neutral,” from “overweight”(*******)(**) “While fundamentals are solid (nowhere more apparent than last week’s earnings results), changes of this magnitude tend to be disruptive,” Piper Jaffray analysts wrote in a note to clients Sunday. (*******)(**) The analysts continued: “Our experience leads us to take a more cautionary view noting the potential lack of momentum and time involved in formalizing a new team.”(*******)(******************)(*******************)(********************)(*********************)(**********************)(*********************)(**********************)(*)(**)(****************************)(****)(*****)Getty(******)(*******)(**)(**********)Price target: (*************)$(***************************************************)(*******)(**)(**********)Rating: (*************)Outperform(*******)(**) “We expect Steve Easterbrook’s departure to weigh on MCD shares given his well regarded reputation gained over the past 5 years,” Cowen analysts wrote in a note to clients Sunday. (*******)(**) They added: “We believe Chris Kempczinski represents the board’s most logical choice to lead MCD, given the importance of the U.S. ((**********************************************************)% of EBIT) to the business and the U.S.’s broadly impressive performance over the last (***************************************************************) quarters.”(*******)(******************)(*******************)(********************)(*********************)(**********************)

(*********************)(**********************)(*)(*****************************)UBS: “Today’s news likely adds uncertainty to investors’ list of concerns.”(************************)(**)(******************************)(****)(*****)Rachel Askinasi/Business Insider(******)(*******)(**)(**********)Price target: (*************)$(******************************************************)(*******)(**)(**********)Rating: (*************)Neutral(*******)(**) “The leadership transitions come at a pivotal point in US franchisee-franchisor relations,” Dennis Geiger, an analysts at UBS, said in a note to clients Monday. (*******)(**) Geiger continued: “Today’s news likely adds uncertainty to investors’ list of concerns, which already include: decelerating US comps, negative EPS revisions, & US breakfast competition, against the backdrop of valuation re-ratings across QSR.”(*******)(******************)(*******************)(********************)(*********************)(**********************)(*********************)(**********************)(*)(*******************************)BTIG: “We still believe the turnaround efforts can continue largely unimpeded.”(************************)(**)(********************************)(****)(*****)Mike Blake/Reuters(******)(*******)(**)(**********)Price target: (*************)$(**************************************************)(*******)(**)(**********)Rating: (*************)Buy(*******)(**) “We are unsure how McDonald’s strategy might change under Mr. Kempczinski’s leadership as most major initiatives are already well underway. We also note that much of the success in the U.S. in recent years has been under his leadership,” BTIG analysts wrote in a note to clients Sunday. (*******)(**) They added: “While the executive ranks might be seeing more transition than normal, we still believe the turnaround efforts can continue largely unimpeded and the concept’s current momentum can be sustained.”(*******)(******************)(*******************)(********************)(********************)

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