(CNN Money) — Recommendation: Sell
No restaurant has played the recession better than McDonald’s. It entered the downturn with a host of ideas to boost profitability, including healthier menus and high-margin drinks like the McCafe Frappe. Now the stock is starting to look frothy. After restructurings, operating margins are at all-time highs, according to Morningstar analyst R.J. Hottovy. That suggests there isn’t much fat left to cut, and the stock is up 36% in the past year. With a strengthening U.S. dollar, which reduces revenues from abroad, and the prospect of lower inflation (and thus lower price increases), McDonald’s may struggle to maintain recent same-store sales increases.
Comment Disclaimer: Comments that contain profane or derogatory language, video links or exceed 200 words will require approval by a moderator before appearing in the comment section. XOXO-MN
