Key Stats for McDonald’s Stock
- Current Price: $242.67
- Target Price (Mid): ~$370
- Street Target: ~$292
- Potential Total Return: ~52.5%
- Annualized IRR: ~10.6% / year
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What Happened?
McDonald’s (MCD) shares closed at $242.67 on October 19, down 20.6% from the 2025 year-end close of $305.63, with third-quarter results expected November 4. Consensus estimates in TIKR now show something they did not show on June 30: revenue shrinking in 2028, from about $29.0 billion in 2027 to about $28.3 billion.
Normalized EPS still rises every year, to around $16.60 in 2030. The investor relations materials from McDonald’s September 23 Investor Day explain most of the split.
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Refranchising Explains Most of the 2028 Revenue Dip
Consensus has revenue falling about 2% in 2028 and about 1% in 2029. Over the same years, the EBIT margin rises from 46.9% in 2025 to around 54% in 2030. Coverage thins that far out: 20 analysts estimate FY2028 revenue, and eight estimate FY2029 and FY2030.
That shape fits management’s plan:
- Raise the franchised share of restaurants from about 95% to about 98% by the end of 2028.
- Cut G&A from about 2.2% to about 1.9% of systemwide sales by 2030.
When McDonald’s sells a company-run restaurant, that restaurant’s sales leave reported revenue, and rent and royalties replace them. In Q2 2026, company-operated restaurants still generated $2,525 million of sales, next to $4,393 million of franchised revenue.
Refranchising does not explain every cut. With nearly identical analyst coverage, the FY2027 revenue estimate fell about 4% between June 30 and October 19.
The $8.5 billion of franchisee support through 2036 also reaches profits gradually. Global Chief Financial Officer Ian Borden explained: “I think one important thing to just note is that $8.5 billion is a cash number. Obviously, when we partner, we amortize that partnering over the remaining term of the franchise agreement. So on average, I would say that’s probably about 10 years.”
U.S. Traffic and Franchisee Buy-In Are the Open Questions
In Q2 2026, U.S. comparable sales came from check growth, partly offset by negative guest counts. At Investor Day, Borden said he expected September to turn positive but the U.S. to post slightly negative comparable sales for Q3.
Consumer Edge card data shared with CNBC shows two rivals gaining among McDonald’s customers in Q3 from a year earlier:
- Chick-fil-A gained 0.58 percentage points of limited-service spending.
- Four coffee chains gained 0.88 points combined.
McDonald’s remained its customers’ largest limited-service chain, and its share losses narrowed across every income group in September. McDonald’s USA President Skye Anderson pointed to a group the chain already reaches: “84% of households with GLP-1 users visit McDonald’s.”
Franchisees fund much of the overhaul, about $800,000 per traditional U.S. drive-thru. Bloomberg reported on October 6 that McDonald’s postponed franchisee tours of its prototype until next year, as operators raised cost concerns. Borden put franchisee payback at about four years after McDonald’s support.
A proposed class action filed October 2 alleges McDonald’s AI pricing tool coordinates menu prices. The claims are unproven, and McDonald’s says franchisees set their own prices.
At about 18x NTM P/E, McDonald’s trades below Yum! Brands (YUM) and Chipotle Mexican Grill (CMG), both near 24x, and Starbucks (SBUX) near 33x. It sits roughly in line with Darden Restaurants (DRI) near 19x.
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TIKR Advanced Model Analysis
- Current Price: $242.67
- Target Price (Mid): ~$370
- Potential Total Return: ~52.5%
- Annualized IRR: ~10.6% / year
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The TIKR model’s mid case, its central scenario, values McDonald’s at around $370 by December 31, 2030. That implies a potential total return of about 52.5% from $242.67, or about 10.6% a year. The Street’s mean target is about $292, with 15 Buys, 4 Outperforms, 14 Holds and 1 Sell.
The target depends on management’s goals landing:
- New restaurants adding nearly 2.5% to systemwide sales growth in 2027.
- About 1.5 points of share gains each in chicken and beverages by 2030.
- An operating margin in the low-to-mid 50% range by 2030.
The primary risk is U.S. traffic staying negative past Q3. Upside comes from share gains on top of the margin lift; downside comes from franchisees slowing NEXT spending.
Conclusion
McDonald’s Q3 report, which trackers expect on November 4, will show whether the split is mix or demand. U.S. guest counts at flat or better would support the refranchising explanation. Another negative quarter would mean the revenue cuts reach beyond mix.
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So what is McDonald’s stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
