McDonald's (NYSE:MCD) Will Continue to Face Cost, Comp Pressures

While McDonald's (NYSE:MCD) will probably continue to be viewed as a "flight to quality," according to Barclays, they will probably continue to experience comp and cost pressure in 2011.

Barclays says, "4Q10 EPS fell short of expectation, ex a favorable tax rate, driven by a deceleration in European comps as well as lower WW margins. Importantly, January WW comps re-accelerated from a December shortfall, with the latter impacted by 'very severe' inclement weather. We believe fear of a 4Q10 comp & margin shortfall was the primary driver of recent underperformance, while underlying fundamentals are still strongest in QSR. We expect MCD will continue to be viewed as a 'flight to quality,' with most peers still to report 4Q10 and likely facing greater 2011 comp and cost pressures."

Barclays reiterates an "Overweight" rating on McDonald's (MCD), which was trading at $75.21, down $0.17, or 0.23 percent, as of 2:52 PM EST. Barclays has a price target of $86 on McDonald's.