McDonald's (MCD) Q3 started slightly negative in July, with results expected to improve going forward as the company takes action to fix execution issues that dragged from Q2 into Q3, Morgan Stanley said in a Tuesday research note.

For the current quarter, Morgan Stanley said it now expects US same-store sales growth of 0.3% compared with the prior estimate of 1.7%. The firm maintained its international operated markets same-store sales growth estimate at 1.8%, and raised its international developmental licensed markets estimate to 3% from 2.8% prior.

Additionally for Q4, Morgan Stanley expects US same-store sales growth to be negative 0.5%, compared with 0.3% growth. Estimates for international operated markets and international developmental licensed markets remain unchanged at 2% and 3.2%, respectively, the firm said.

Morgan Stanley lowered its price target to $319 from $322 and maintained its equalweight rating.

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