McDonald's: Lifting Intrinsic Valuation on Loyalty, Unit Growth Updates; Shares Slightly Cheap

Wide-moat McDonald's investor day left us impressed, with color regarding the firm's loyalty program opportunities, aggressive development targets, and investments in rationalizing redundant expenditures across its global technology stack seeming like investments poised to unlock substantial value for the world's largest restaurant brand. We plan to raise our $290 fair value estimate by a high-single-digit percentage, attributable to loyalty-enabled comparable store sales increases (3%-4% valuation impact), better-than-expected unit growth (4%), and time value (1%).