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Fast-food firm McDonald's (NYSE: MCD) received a boost this morning, as Deutsche Bank upped the company to Buy from Hold. The brokerage noted that the burger behemoth could receive a boost in the second half of the year from its McCafe line of beverages. These drinks are now available in 10,000 locations, up from 1,000 restaurants a year ago. McCafe is in the midst of a heavy advertising campaign, which includes TV, radio, print, online and outdoor ads that were launched earlier this month. MCD is spending more than $100 million in order to introduce McCafe to the American masses.
In addition, Deutsche Bank believes that easing commodity and currency pressures will likely help the eatery's results. Thanks to this analysis, the brokerage believes that MCD's current stock price provides a "good entry point." In fact, the analyst stated that "With the stock now boasting an all-time high dividend yield and an improving earnings outlook, we believe shares are as attractive as they've been in quite some time." He also raised MCD's price target to $65 from $60.
For the stock, $65 is a definite possibility, but it will have to topple intermediate- and long-term resistance in the process. Nevertheless, if the stock will advance to $65, this is indeed a good entry point. If we are in the midst of an economic recovery, MCD could enjoy a bit of a boost. Of course, the low-priced restaurant has done an admirable job in the current economic slowdown thanks to its cheap eats.
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