McDonald's: 5 Interesting Themes These Analysts Are Watching

In a report published Tuesday, Cleveland Research Company analyst Steven Gojack presented five key themes that McDonald's Corporation (NYSE: MCD) should be aware of.

1. 2015 is likely a "transition year" as the company is focusing on improving its brand image, de-emphasizing its dollar menu, reducing menu complexity and improving product quality. With expectations of a 12- to 18-month turnaround timeframe, 2016 has a "more positive" outlook.

2. McDonald's is working to improve drive-thru efficiency and increasing in-store sales through an improved product quality and experience. The analyst noted however that the company's "Create Your Taste" campaign may lead to operational headwinds given the large investment required and increased operational complexity.

3. McDonald's has an opportunity to remove more items from its core menu and improve its freshness image by increasing in-store prep such as cutting tomatoes and lettuce in-restaurant on a daily basis. The company is also working on upgrading quality around chicken and potentially beef, among other categories.

4. Long-term, McDonald's wants to move its clients away from lower value menu offerings as franchise profitability has been under pressure the past few years. The analyst highlighted that the company is under-priced compared to peers on its value menu and shift its menu to above dollar price points.

5. Long-term, McDonald's is moving to a regional structure to help position the company for a more relevant menu offering, promotional strategy and matching local and tastes and preferences.

McDonald's is not formally covered by Cleveland Research and does not have an investment opinion.