Update re McDonald's/MCD

Business Week (via Briefing.com) reports McDonald's/MCD missed this year's robust stock market rally. While the is up S&P 15%, shares of the co are off 3%. But some savvy pros regard the lag as an opportunity. "McDonald's is the only new name we added this year to our portfolio," says Edwin Walczak, U.S. portfolio chief at Swiss bank Vontobel. From a 52-week high of 64 on Jan. 6, the stock has slipped to 60.34. Part of investor concern is McDonald's lower forecast for store openings, mostly in China, Japan, and Eastern Europe. At this depressed price, says Walczak, "the stock is a bargain as McDonald's continues to innovate in its core menu and business structure." He figures that with estimated earnings of $4 a share in 2009 and $4.50-$5 in 2010, it is worth 75. Using its "prodigious excess cash flow," he notes, McDonald's has been buying back its shares. Sara Senatore of Sanford C. Bernstein, who rates McDonald's outperform, says the modest decline in store openings simply reflects a temporary weakness in demand. She's encouraged by McDonald's decision to expand in its growth markets, including Australia, France, and Russia. "We see ample room for unit expansion in most of McDonald's markets."