McDonald's: Strong Fundamentals But A Cautious Technical Outlook

The potential on offer in China is firmly within the sights of US fast-food giant McDonald's. After opening 200 fast-food stores in China over the course of 2011, McDonald's plans to further ramp up its investment in the country by around 50% in 2012. A continued expansion of its product offerings and strengthening of its distribution capabilities are likely to remain strategic priorities for McDonald's as it pits itself against market leader Yum! Brands in China. While we like the long-term fundamental story of McDonald's, its valuations are at extremes, and we doubt whether a major leg-up from such elevated levels are on the cards.

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