The growth momentum at McDonald’s (MCD) should continue despite the sudden departure of Chief Executive Steve Easterbrook since his replacement is the co-author of the fast-food giant’s push to drive sales, Credit Suisse said Monday.
Chicago-based McDonald’s on Sunday said Easterbrook left the company after its board determined he “violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee.”
Easterbrook admitted to the relationship in an email to employees, saying it was “a mistake,” CNN reported. He had been chief executive since March 2015.
Credit Suisse said Chris Kempczinski, who was named president and chief executive with immediate effect, “was instrumental in the development of future growth drivers, with implementation and executive now the focus.”
Kempczinski had been president of McDonald’s USA business. Joe Erlinger, president of international operated markets, was named the new head of the US business.
McDonald’s “has a talented bench,” Credit Suisse said. “We expect management and the board have a like-minded strategy and view momentum as sustainable despite Easterbrook’s departure.”
Credit Suisse maintained its outperform rating on McDonald’s along with its $230 price target.
McDonald’s in March 2017 announced its Velocity Growth Plan to drive sales through enhancing its digital operations in its stores and expanding delivery services.
“Given MCD’s current global strength, deep bench and strong franchises base, the management transition does not alter our positive view of the company,” said Credit Suisse.
In a filing with the SEC on Monday, McDonald’s said Easterbrook will receive 26 weeks of severance that will paid in a lump sum six months following his Nov. 1 termination date and will receive health-care benefits until May 31. Easterbook will be allowed to keep his stock options. The separation has a two-year non-complete clause that bars him from working from a host of competitors, including Restaurant Brands International’s (QSR) Burger King, Yum Brands (YUM), and Chick-fil-A, among others.