McDonald's Outperforming the Market Ahead of Upcoming Earnings Report.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 17h ago
0mins
Source: Barron's
- Earnings Growth Expectation: Wall Street anticipates that McDonald's will report growth in both revenue and earnings.
- Value-Led Strategies: The fast-food chain's strategies focused on value are helping to mitigate the challenges posed by a difficult economic environment.
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Analyst Views on MCD
Wall Street analysts forecast MCD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MCD is 337.63 USD with a low forecast of 300.00 USD and a high forecast of 375.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
23 Analyst Rating
12 Buy
11 Hold
0 Sell
Moderate Buy
Current: 325.970
Low
300.00
Averages
337.63
High
375.00
Current: 325.970
Low
300.00
Averages
337.63
High
375.00
About MCD
McDonald's Corporation is a global foodservice retailer. Its segment includes U.S., International Operated Markets, and International Developmental Licensed Markets & Corporate. The U.S. segment is its largest market and is 95% franchised. The International Operated Markets segment is comprised of markets, or countries in which it operates and franchises restaurants, including Australia, Canada, France, Germany, Italy, Poland, Spain, and the United Kingdom. This segment is 89% franchised. The International Developmental Licensed Markets & Corporate segment is comprised of developmental licensee and affiliate markets, including equity method investments in China and Japan. This segment is 99% franchised. Its menu features hamburgers and cheeseburgers, the Big Mac, the Quarter Pounder with Cheese, the Filet-O-Fish, and several chicken sandwiches, such as the McChicken and McCrispy as well as Chicken McNuggets, Fries, shakes, sundaes, cookies, soft drinks, coffee, and other beverages.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Expectations: McDonald's is projected to generate $6.84 billion in revenue for Q4, demonstrating its capacity for stable income growth amid high-income diners shifting from fast-casual options.
- Same-Store Sales Growth: Analysts predict a 3.9% increase in same-store sales, with a notable 5.4% rise in the U.S., highlighting the effectiveness of promotional activities and value menu offerings in attracting more customers.
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- Franchisee Rights Advocacy: An independent franchisee advocacy group adopted a Franchisee Bill of Rights in August, emphasizing that franchisees should have the right to set prices based on market conditions, reflecting dissatisfaction with the company's new standards and a defense of their operational autonomy.
- Franchise Standards Update: The new franchise standards implemented on January 1 require assessments of how prices convey value, and while franchisees can still set their own prices, these standards may influence their operational methods, leading to increased dissent among some operators.
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- Holiday Menu Sparks Excitement: The holiday-themed 'Grinch' menu launched in early January, combined with the October Boo Bucket merchandise, generated consumer enthusiasm, becoming a highlight for family gatherings and further increasing the brand's market share.
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- Earnings Per Share Forecast: Analysts expect McDonald's Q4 earnings per share to be $3.05, indicating the company's ability to maintain profitability despite challenges from reduced spending among low-income consumers.
- Revenue Expectations: McDonald's is projected to generate $6.84 billion in revenue for Q4, demonstrating its capacity for stable income growth amid high-income diners shifting from fast-casual options.
- Same-Store Sales Growth: Analysts predict a 3.9% increase in same-store sales, with a notable 5.4% rise in the U.S., highlighting the effectiveness of promotional activities and value menu offerings in attracting more customers.
- Stock Performance: Despite the sales rebound, McDonald's shares have only risen about 4% over the past year, primarily impacted by broader concerns about consumer confidence and the rise of GLP-1 drugs, reflecting market apprehensions regarding the fast-food sector.
See More
McDonald's Doubles Down on Value Strategy to Boost Sales
- Value Strategy Reinforcement: McDonald's has reinforced its value messaging to customers through the introduction of Extra Value Meals and Snack Wraps, which is expected to boost sales this quarter, although some franchisees express dissatisfaction over restrictions on their pricing autonomy.
- Franchisee Rights Advocacy: An independent franchisee advocacy group adopted a Franchisee Bill of Rights in August, emphasizing that franchisees should have the right to set prices based on market conditions, reflecting dissatisfaction with the company's new standards and a defense of their operational autonomy.
- Franchise Standards Update: The new franchise standards implemented on January 1 require assessments of how prices convey value, and while franchisees can still set their own prices, these standards may influence their operational methods, leading to increased dissent among some operators.
- Market Performance and Outlook: Despite franchisee dissatisfaction with corporate policies, McDonald's stock rose 5% in 2025, a standout performance in a struggling restaurant sector, indicating its competitive advantage in the quick-service market and potential for future earnings growth.
See More
McDonald's Adapts Menu for GLP-1 Drug Users
- Menu Adjustment Strategy: McDonald's is testing high-protein options to attract the growing number of customers using GLP-1 weight-loss drugs, with the CEO noting that as adoption increases, consumer eating habits are shifting, particularly towards protein-rich meals.
- Changing Eating Habits: The Vice President highlighted that customers are favoring smaller portions and less sugary drinks, reflecting a shift in dietary preferences among GLP-1 users, and McDonald's plans to serve this customer segment long-term to meet market demand.
- Earnings Beat Expectations: McDonald's latest earnings report revealed Q4 2025 revenue of $6.83 billion and earnings per share of $3.05, surpassing analyst expectations, with the $5 meal deal driving a 9% increase in U.S. same-store sales, appealing to budget-conscious consumers.
- Global Expansion Plans: Despite facing pressures from rising menu prices and softening demand among low-income customers, McDonald's plans to open 2,200 new restaurants globally and reintroduce popular items like Snack Wraps and new chicken strips to drive business growth.
See More
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- Futures Recovery: Following Wednesday's decline, U.S. stock futures rose after a strong January jobs report, indicating improved market sentiment, particularly with the Dow Jones index up by 0.21%.
- Interest Rate Expectations: The CME Group's FedWatch tool shows a 94.1% likelihood that the Federal Reserve will keep interest rates unchanged in March, reflecting cautious investor sentiment regarding future monetary policy.
- Employment Data Impact: Analysts noted that the three-month average nonfarm payroll growth reached 73,000 in January, the highest since February 2025, which has led to increased expectations for potential Fed rate hikes due to the stability of this data.
- Commodity Market Trends: Crude oil futures rose by 0.36% to $64.86 per barrel, while gold spot prices fell by 0.47% to $5,059.50 per ounce, indicating a cautious sentiment among investors in the commodities market.
See More
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- Economic Data Impact: The rise in stock futures comes in the wake of a delayed U.S. monthly jobs report and other economic indicators.
See More
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- Significant Revenue Growth: McDonald's reported a 10% increase in Q4 revenue to $7.01 billion, surpassing Wall Street's expectations of $6.84 billion, indicating strong performance in a competitive fast-food market.
- Value Meals Drive Sales: CEO Chris Kempczinski noted that the launch of McValue at the start of the year and the relaunch of Extra Value Meals in September attracted low-income consumers, enhancing the company's value and affordability scores, thereby driving sales growth.
- Holiday Menu Sparks Excitement: The holiday-themed 'Grinch' menu launched in early January, combined with the October Boo Bucket merchandise, generated consumer enthusiasm, becoming a highlight for family gatherings and further increasing the brand's market share.
- Investor Sentiment Optimistic: Retail sentiment surged from 'bullish' to 'extremely bullish', with message volumes spiking 1,100%, reflecting strong investor confidence in McDonald's future performance, as the stock gained over 4% in the past 12 months.
See More
