Analyst Note| Sean Dunlop |
Wide-moat McDonald's announced its exit from the Russian market with a May 16 press release detailing its plans to disassociate from its approximately 850 stores in the country. This move was already contemplated in our base-case scenario, with our forecasts stripping out the revenue (9%), operating profit (3%), and forward unit growth from Russia and Ukraine. Consequently, we anticipate no material changes to our $227 fair value estimate. Our view appears to have been priced in to the markets already, with minimal price action in early trading. The shares continue to look expensive at current market prices.