Monday, February 26, 2024
Hometalking numbersWhy investors could soon start lovin' McDonald's

Why investors could soon start lovin’ McDonald’s

The fast-food giant reported first-quarter earnings just shy of street estimates, but did see a rise in March sales. The mixed results sent the stock from positive to negative throughout the trading day, and eventually lower for the close.

Today's price action serves as a sort of microcosm for the stock this year. McDonald's shares have been stuck in a range over the past 12 months, gaining less than one percent and lagging the broader market. Meanwhile, competitors such as Sonic, Jack in the Box, Wendy's and Burger King have surged.

So is it worth taking a bite out of the golden arches?

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"I think McDonald's is the ultimate safe name," notes Zachary Karabell, Head of Global Strategy for Envestnet and CNBC contributor. But "safe" doesn't necessarily make it a profitable investment. Karabell doesn't see any reason to buy the stock, "I feel totally uninterested but also rather neutral. I don't think it's a dynamic space. I don't see this outperforming the overall market."

(Watch: McDonald's needs US to turn positive: Analyst)

The charts, however, look enticing to Richard Ross of Auerbach Grayson. "When you look at it long-term, McDonald's has been a fantastic performer."

Ross also points out that the 150-week moving average, a key technical indicator, has held over the past 12 years, a bullish development in his opinion. "I like my odds here," he said. "Slow and steady wins the race, especially in a market which is uniquely vulnerable to sharp and swift declines."

Check out the video for the full discussion on CNBC 'Street Signs.'

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