Is Fast Food Over Done?

In an economy where a good percentage of jobs being added are part time or earning $7.50/hour, I always wondered when the spending would slow, or at least corporations' efforts to hide it from their earnings line via internal re-organization, share buybacks, exhausting inventories, etc would run their course........and that time may be upon us.  Consider that MCD is already running their wildly famous "Monopoly" game now, in July rather in it's typical October/November slot and you get an idea that they're doing whatever they can to rustle up business.    24/7 Wall Street is wondering if the party is over as well.  My question now is who's next?  Mid-level retailers?  Leisure and activities? 

After McDonald’s Corporation (NYSE: MCD) posted a disappointing company earnings report we can only yet again consider that perhaps the easy money has been made in the casual dining sector. Many of these stocks have run up and done incredibly well since the end of the recession and now the private equity buyers have been sneaking their restaurant chains and even fine dining chains back on to the stock market.

How can single-digit earnings and revenue growth be exciting even with an at-market multiple of about 17-times expected earnings? Maybe this is not just a growth concern. Maybe there is a concern that there are just real catalysts that want to make McDonald’s investors chase the stock up over $100 now even if there is a 3% dividend yield. The analyst community had a consensus stock target price of over $106 ahead of earnings and that may be ratcheted slightly lower. If so, then McDonald’s may not be exciting until shares get back into the low-$90s or even back into the high-$80s again.

Checkout their analysis of others within the casual dining sector such as YUM, BKW, JACK and CMG @  McDonald’s May Signal Peak Valuation in Fast Food and Casual Dining Stocks - McDonald's (NYSE:MCD) - 24/7 Wall St.  

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