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Has McDonald's Had Too Much Caffeine?


MCD has outperformed the S&P 500 by ~30% since the market turmoil in August, but shares look ripe for a correction.

Raising shareholder dividends for 25 consecutive years is no small feat, but 2015 will be the first year of net store closings in the U.S. since 1970.

McDonalds has seen a huge divergence between its revenue and earnings expectations, and I expect this to reflect in its share price in the near-future.

Shares of McDonald's (NYSE:MCD) have outperformed the S&P500, with the gap widening since 2003, no doubt an impressive return.

I think MCD is one of the best stocks to hold in ones portfolio for the long-term. I am however concerned with the expectations currently priced into the equity.

Firstly, the TTM P/E ratio is about ~42% above its valuation from 2011 through 2014, 25 vs. 17.5(avg).

This could be a great sign for shareholders as investors are bidding up the valuation of the stock in anticipation of future revenue and earnings growth. Critically, in Jan 2015 MCD...