McLympics? An Opportunity for McDonald’s This Year

As if McDonald’s (NYSE:MCD) were not already doing ‘very very well’ in the U.K., France, Germany and Russia, according to Credit Suisse restaurant analyst Keith Siegner, the fast food chain is expected to get a boost from the London Olympics this summer. Siegner noted on Monday that “The Olympics are in London, a massive, massive market for them, and I don’t really necessarily see a reason why (same-store sales) should slow in the summer”.

Indeed, McDonald’s’ greatest risk for this year is expected to be the exchange rate; to the extent to which the company must buy euros or other currencies to operate its European stores, its exposure to the rates changes for better or for worse. The company’s fourth quarter earnings report will be released before markets open on Tuesday. Shares had hit a 52-week high on Friday at $102.22, but then pulled back in anticipation of the report. Credit Suisse rates the stock as Outperform, and Siegner says that it ‘has plenty of room to grow’.

The analyst summed up expectations as follows:

“If you think about last year, you have an really attractive combination of growth in fundamental earnings, plus a (foreign exchange) tailwind, plus multiple expansions. This year might be more focused on earnings per share growth than the other two, but I still think there’s a legitimate case for upside the numbers for fiscal 2012, and I think that that’s what people are going to be looking for tomorrow.”

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