Key Stats for McDonald’s Stock
- Price change for McDonald’s stock in last 6 months: -24%
- $MCD Stock Price as of Sep. 24: $237
- 52-Week High: $342
- $MCD Stock Price Target: $307
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What Happened?
McDonald’s (MCD) stock fell more than 5% after the company’s investor day. Shares hit their lowest level since 2022.
The tone was cautious from the start. CEO Chris Kempczinski said he expects high inflation and flat traffic to keep weighing on the restaurant industry.
That means McDonald’s must win customers from rivals to grow.
The U.S. business is already under pressure. Same-store sales grew just 0.8% last quarter as fewer people visited.
Management also said U.S. sales will likely be slightly negative in Q3.
To turn things around, McDonald’s unveiled a plan called NEXT. Here’s what it includes:
- A major upgrade to menu taste and quality, aiming to gain about 1.5 share points in both chicken and beverages by 2030.
- AI tools in restaurants, including voice ordering in the drive-thru.
- About 250 basis points of restaurant efficiency gains, or roughly $100,000 in yearly cash flow for an average U.S. restaurant.
- Operating margins in the low to mid-50% range by 2030.
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What the Market Is Telling Us About McDonald’s Stock
Investors focused on the cost. McDonald’s plans to spend $8.5 billion through 2036 to help franchisees upgrade restaurants, including about $5 billion by 2030. That’s a big bill while sales are soft.
Analysts cut their targets.
- BTIG lowered its price target to $295 from $350 but kept a Buy rating. It questioned whether the 250 basis points of efficiency gains are realistic.
- RBC cut its target to $285, and JPMorgan lowered its target to $260.
- Not everyone is bearish on McDonald’s stock. UBS kept a Buy rating with a $320 target.
- Jefferies reiterated Buy at $325 and said the margin plan beat expectations.
- KeyBanc kept an Overweight rating with a $305 target.
BTIG also said sentiment around McDonald’s stock looks overly negative. Every one of these price targets sits above the current share price.
The takeaway is simple. McDonald’s has a clear plan, but it needs time and money to work.
Until U.S. traffic improves, McDonald’s stock may stay under pressure.
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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!
