Price Forecast:

Bullish Case: Despite current volatility due to the E. coli outbreak, McDonald's strong fundamentals, effective digital strategies, and anticipated recovery from short-term concerns suggest a potential rebound. Increased consumer loyalty and diversification could enhance long-term growth.

Bearish Case: Ongoing public health crises threaten McDonald's reputation, potentially leading to decreased customer trust and declining sales. High volatility indicates fragile market sentiment and unresolved operational challenges may hinder recovery.

Potential Outcomes:

• Strong recovery post-outbreak (60% chance): Effective damage control and customer trust restoration.
• Continued decline in sales (25% chance): Heightened consumer concerns affect traffic.
• Steady dividend increase (15% chance): Reflects confidence but may attract scrutiny amid volatility.

Trading Oracle: Adopt a bullish debit spread by buying $295 calls and selling $300 calls, aiming for short-term recovery leveraging reduced implied volatility. With options volume skewed towards calls, probability of profit is enhanced. Consider holding for 20-30 days to align with recovery trends. Potential return around 12%.

November 15, 2024