McDonalds' to ride coffee - 17-06-2009

Shares of McDonald's Corp have lagged during the recent market recovery, but new specialty-coffee items, growth in China and a more stable dollar could combine to jump-start the fast food giant's stock, according to a report in Barron's financial newspaper. 

"The fast-growing, high-margin beverages turf can boost sales by 10 percent or more," the report said, quoting a Morgan Stanley analyst.

"But if the beverage roll-out and growth in China exceed expectations, the company could earn $4.42 a share in 2010 and trade at a super-sized 18-times multiple. That would peg shares at about $79," Barron's said.