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McDonald's (MCD +2.59%) stock has been under pressure this year. The company's share price is down just under 20% across 2026's trading, and it's off almost 28% from its lifetime high.

The company is facing declining consumer traffic, more challenging unit economics, and price increases that have complicated its value proposition, as well as the possibility that GLP-1s and other diet drugs will become a sustained limiting factor on demand.

With the stock down substantially, is McDonald's a good buy right now?

Image source: Getty Images.

McDonald's share sell-off has lowered the company's forward price-to-earnings ratio to roughly 19. Sell-offs have also pushed the company's dividend yield up to roughly 3%, and the payout looks well covered despite recent headwinds facing the business.

$252.63+$6.38 (+2.59%)

NYSE · As of 4:00 PM ET 10/22/26

While the company's forward P/E is roughly in line with the S&P 500 (^GSPC -1.21%) and looks low on a historical basis, the company's valuation should also be viewed in the context of its growth. Global same-store sales increased 1.3% annually in the second quarter, with gains primarily driven by higher ticket prices amid unfavorable traffic trends. Meanwhile, earnings per share increased roughly 5% year over year on a currency-adjusted basis.

McDonald's is a great business, but there is currently no shortage of companies in the S&P 500 that offer a more appealing profile in terms of earnings growth and valuation. The headwinds facing the business are likely to continue in the near term, and I think that patient investors may be able to buy the stock at an even steeper discount.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.

Investors, even professionals with years of experience, can be seduced by stocks mired in bear markets. Arguably, that temptation is ratcheted up when the stock in question is an older large-cap company. Think of it as the theory of a "strong stock in a weak place."

With the stock trading 29% below its 52-week high of $341.75, it appears many investors aren't yet taking the bait on McDonald's (MCD -0.11%), and it's easy to understand why. Not only is the fast-food stock well into bear-market territory, but its 20.6% decline in 2026 makes it the third-worst performer in the Dow Jones Industrial Average, with only International Business Machines and well-documented offender Nike delivering worse returns.

McDonald's could rebound, but investors will need to be patient. Image source: Getty Images.

Following a Monday, Oct. 19, close at $242.67, shares of McDonald's are probing levels rarer than McRib availability. On the other side of the coin, patient investors who embrace the stock today may be rewarded over the long term.

Royal vibes Due to the aforementioned declines, McDonald's shares yield 3.2%, nearly triple the S&P 500's dividend yield. Speaking of this dividend, which has long been one of the stock's primary attractions, the burger chain boosted its payout last month, marking the 50th consecutive year it has done so. That makes McDonald's a Dividend King, or one of the rare companies with dividend increase streaks of at least 50 years.

More important is the fact that McDonald's payout increase was nearly 4%, slightly topping the September jump of 3.7% (year over year) by the Consumer Price Index. In other words, the McDonald's dividend has some inflation-fighting chops.

Tapping into the McDonald's dividend as an inflation buffer has merit, as experts have long viewed dividend growth stocks as effective inflation hedges. After all, assuming more tolerable inflationary environments, payout growth helps investors retain more of their purchasing power.

$246.25-$0.27 (-0.11%)

NYSE · As of 4:00 PM ET 10/21/26

There's no telling when the Federal Reserve will get inflation under control, but if Morningstar is right, the McDonald's payout could average annual growth of 9% over the next decade. Barring a 2022 sequel, 9% growth should be a more-than-adequate inflation hedge.

McDonald's is trying to get it right Typically, stocks don't fall 29% from their 52-week highs without good reason. For McDonald's, higher costs and cost-conscious, inflation-sensitive consumers have been headwinds. And CEO Chris Kempczinski owns up to execution woes creating dissatisfaction among customers.

The company isn't sitting idly by, hoping for customers to return simply because they like McDonald's. At its recent investor day, the fast-food king unveiled its NEXT plan, which includes a broader embrace of artificial intelligence (AI), store revamps, streamlined operations, and a simplified menu. Don't underestimate the potential benefits of menu simplification, because many customers value simplicity and value, not complexity. NEXT aims to boost cash flow by $100,000 per year at an average McDonald's location.

As the stock's price action confirms, investors are in "show me" mode about the NEXT gambit. Still, if the execution is there, McDonald's could shake out of its current rut, and that's more important to investors than the possibility that McRib could make another appearance over the near term.

Key Takeaways McDonald's U.S. comparable sales rose 0.8% in Q2 2026, falling short of expectations.Weak FIFA campaign, low offer awareness and fewer digital deals drove two-thirds of the traffic shortfall.McDonald's plans personalized digital offers, more value-meal spending and a focused marketing calendar.
McDonald’s Corporation (MCD - Free Report) is refining its marketing approach to improve customer engagement and support baseline sales growth. The company’s second-quarter results exposed gaps in campaign execution, as several promotional initiatives failed to generate the expected response. Too many marketing messages within a short period also made it harder for customers to recognize individual offers and placed additional pressure on restaurant operations.

In the second quarter of 2026, U.S. comparable sales grew 0.8%, below the company’s expectations. The FIFA campaign underperformed, while the previous year’s successful Minecraft promotion created a difficult comparison. MCD also faced challenges in communicating its new under-$3 Everyday Affordable Price menu. Lower-than-expected customer awareness and inconsistent restaurant-level execution limited the program’s contribution. These factors, combined with reduced digital offers and the removal of the Buy One, Add One for $1 promotion, accounted for approximately two-thirds of the customer traffic shortfall relative to expectations.

McDonald’s is adjusting its marketing priorities to address these issues. The company plans to increase personalized digital offers for frequent customers and allocate more marketing spending to established value offerings, including Extra Value Meals. The broader approach also places greater emphasis on creator engagement, influencer-led campaigns and the food quality and restaurant experience that support regular customer visits.

The key challenge lies in balancing promotional campaigns with baseline demand. McDonald’s recognizes that frequent product launches and short promotional windows may dilute customer awareness and complicate restaurant execution. A more focused marketing calendar, supported by relevant customer engagement and consistent execution, remains central to improving sales performance.

MCD vs. Restaurant Brands & Wendy’s: Can Marketing Drive More Sales?McDonald’s faces the challenge of improving campaign effectiveness and customer engagement after recent promotions fell short of expectations. Restaurant Brands International Inc. (QSR - Free Report) has linked Burger King’s marketing campaigns with product and service improvements, while The Wendy’s Company (WEN - Free Report) is shifting toward more consistent brand messaging to address weak customer traffic.

Burger King’s U.S. comparable sales increased 8.5% in the second quarter of 2026, outperforming the burger quick-service restaurant industry by more than 9 percentage points. Restaurant Brands built on its Whopper elevation campaign through initiatives such as Whopper Wednesday and Whopper by You. Average unit volumes across the Whopper platform increased more than 20% since the campaign’s launch. Service initiatives, including the Your Way Champion program and Whopper Guarantee, also support efforts to improve the customer experience.

Meanwhile, Wendy’s global systemwide sales declined 6.5% in the second quarter, while U.S. same-restaurant sales fell 7%. Traffic dropped 12.5%, and recent product launches and promotional collaborations failed to generate the expected customer response. The company plans to move away from frequent promotions toward a more consistent brand narrative.

For MCD, the comparison highlights the importance of connecting marketing campaigns with product quality, service execution and a clear brand message. These factors remain central to turning promotional activity into stronger customer engagement and sales.

MCD’s Price Performance, Valuation & EstimatesMcDonald’s shares have lost 22.3% in the past six months, underperforming the Zacks Retail - Restaurants industry, the broader Retail and Wholesale sector and the S&P 500 Index.

MCD Six-Month Price Performance
Image Source: Zacks Investment Research

In terms of its forward 12-month price-to-earnings ratio, MCD is trading at 17.44, below the industry’s 19.9.

MCD P/E (F12M)
Image Source: Zacks Investment Research

MCD’s earnings estimates for 2026 and 2027 have trended downward in the past 30 days. The revised estimates for 2026 and 2027 imply year-over-year growth of 5.3% and 6.6%, respectively.

MCD Estimate Trend
Image Source: Zacks Investment Research

McDonald's (MCD +0.04%) stock is down big this year. It has fallen more than 23% even as the S&P 500 has risen by 14% and hit new record highs. It's been a disastrous year, and there are no guarantees that things will get better anytime soon. The company has been offering more value options, but it hasn't been fixing its growth problems. Meanwhile, inflation remains elevated.

For prospective McDonald's investors, this all paints a concerning picture. While it still has an iconic brand, there's definitely more risk surrounding the fast food stock than normal, and its shares could still go lower.

Image source: Getty Images.

Why McDonald's could have little choice but to raise pricesMcDonald's has a problem. Costs are rising, and its same-store growth rate in the U.S. market was a paltry 0.8% in its most recent quarter. That's not going to win over investors, much less convince them that the business is bringing in more customers with greater discounts and value options.

Meanwhile, beef prices have been rising considerably. CEO Chris Kempczinski says that in its key markets, beef costs have roughly doubled in a span of five years. A solution to combat that is, of course, to raise prices. It's a tough situation to be in because on the one hand, the company wants to protect margins, but higher prices may result in even lower growth numbers, which may contribute to lower earnings anyway, even if the margins are a bit stronger.

McDonald's is already struggling to prove to consumers that it provides good value. Raising prices again may only exacerbate those issues.

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Should investors buy the stock on weakness?McDonald's has declined significantly in value this year, and its forward price-to-earnings multiple is modest at 17 (based on analyst expectations). By comparison, the average stock in the S&P 500 is trading at close to 20 times its estimated earnings. It's a relatively cheap buy, and it is trading around its five-year low.

There's some decent value here for investors, if for no other reason than to secure a solid, growing dividend. At 3.3%, McDonald's does offer a relatively high yield, and it raised its dividend for a 50th consecutive year earlier this year, becoming a Dividend King in the process.

Although McDonald's is facing some challenges, so too are many other fast food and restaurant chains. It has, however, shown over not only years but decades, its ability to adapt and evolve to customer needs. That's why, as a long-term investment, it can still be a good buy right now, even if, in the short term, it may be a bit of a bumpy ride for investors.

McDonald's (MCD -0.48%) shares are down roughly 32% from the $341.75 all-time high they hit in February, recently trading near $232, close to a four-year low. That's a steep drop for a company this size, but it isn't the first time McDonald's stock has fallen this hard. It's happened twice before, and both times, the stock eventually came back stronger than it went in.

Image source: Getty Images.

The 2003 crisis: McDonald's fell 70% before its biggest turnaround In early 2003, McDonald's posted its first quarterly loss since going public in 1965, and the stock had fallen 70% from its 1999 peak, hitting an all-time low near $12, according to NPR. The cause was years of overexpansion and inconsistent restaurant quality -- growth for growth's sake rather than a focus on the customer experience.

The company's response -- a plan called "Plan to Win" -- shifted the focus to existing restaurants instead of opening new ones, cut capital spending, and introduced the "I'm lovin' it" brand campaign. It worked. Between March 2003 and October 2004, McDonald's stock rose 105%, more than triple the S&P 500's 35% gain over that same stretch.

The 2015 slump: a stale menu and a modern fix A decade later, McDonald's hit trouble again. U.S. market share slipped from 17.4% in 2012 to 15.4% by 2016, and the company reported its first negative global same-store sales in more than a decade, according to Entrepreneur. The menu had grown cluttered, and the brand felt dated.

Then-CEO Steve Easterbrook repositioned McDonald's as a "modern, progressive burger company," moved toward a nearly fully franchised model, and launched all-day breakfast in October 2015 after years of customer requests. The stock nearly doubled over the following two years.

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This time looks different in one important way McDonald's current slump shares real similarities with those earlier ones: There is declining traffic, a menu and value perception that's lost its edge, and new competition. But there is a big new investment plan coming as the fix.

In September, the company unveiled an $8.5 billion restaurant modernization plan running through 2036, including an AI-powered ordering system, hand-breaded chicken, protein-forward menu items aimed partly at GLP-1 drug users, and efficiency upgrades the company says could add roughly $100,000 in annual cash flow per average U.S. restaurant, according to ABC.

But there's a key difference. In 2003 and 2015, McDonald's framed its problems as things it had broken and could fix. This time, CEO Chris Kempczinski has described persistently high food costs, with beef prices nearly doubling over five years, and softer traffic as simply "the environment" going forward, not a temporary rough patch to wait out, according to comments spoken to CNBC. McDonald's is also testing third-party ads on its drive-thru digital order boards, which could eventually bring in about $1 billion in additional revenue.

That's a more honest and creative read of the macro backdrop we are seeing these days. Still, it also means this turnaround has to win customers back in a tougher economic climate than the ones that powered the 2004 and 2016 recoveries.

Is it a buy now? History leans in McDonald's favor here: The company has twice turned a steep, double-digit drawdown into a multi-year stock that more than doubled by actually reinvesting in the core restaurant experience rather than cutting its way to profitability. Add to this the fact that McDonald's has increased its dividend every year since 1976 and just became a Dividend King in 2026 after reaching 50 consecutive years of dividend growth.

I'd treat this less like a quick trade and more like a multi-year bet that McDonald's $8.5 billion plan and AI-driven efficiency push can win back customers, even if the broader economic backdrop doesn't improve.

McDonald’s Corporation (NYSE:MCD) drew a pair of price forecast cuts on Monday as analysts weighed softer U.S. sales trends, heavier investment and execution risks around the restaurant giant’s value strategy.

Wells Fargo analyst Zachary Fadem maintained an Overweight rating and lowered his price forecast from $300 to $270, while Guggenheim analyst Gregory Francfort kept a Neutral rating and cut his price forecast from $290 to $250.

Francfort also lowered his earnings estimates, citing weaker-than-expected U.S. same-store sales, slower global unit growth and higher capital reinvestment.

His revised outlook factors in stronger same-store sales growth over the next several years as those investments begin generating returns. It also incorporates McDonald’s plan to refranchise 60% of its existing company-operated restaurant portfolio and changes to how the company supports franchisees.

Francfort now expects adjusted EPS of $13.50 in 2027 and $14.35 in 2028, below consensus estimates of $13.88 and $14.77, respectively.

Guggenheim said McDonald’s continues to benefit from unmatched U.S. scale, powerful marketing and digital capabilities and a highly profitable franchise model. However, the firm wants clearer evidence that franchisees are aligned behind the company’s value initiatives and operational improvements before becoming more constructive on the stock.

Earnings OutlookMcDonald’s next major scheduled catalyst is its third-quarter earnings report, currently estimated for Nov. 4, 2026.

Analysts expect EPS of $3.39, up from $3.22 a year earlier. Revenue is projected at $7.30 billion, compared with $7.08 billion in the year-ago quarter.

Investors will likely focus on U.S. comparable sales, customer traffic, franchisee economics and whether McDonald’s value initiatives are gaining enough traction to offset continued pressure on lower-income consumers.

McDonald’s Faces AI Pricing LawsuitSeparately, McDonald’s is facing a proposed nationwide class-action lawsuit alleging it illegally coordinated menu prices across franchise and company-owned restaurants using an AI-powered pricing system, Reuters reported.

The lawsuit, filed Friday in federal court in Chicago, alleges McDonald’s violated U.S. antitrust law by using algorithms trained on nonpublic data to help coordinate prices with independent franchisees.

McDonald’s denied the allegations Monday, calling them speculative and uninformed. The company said AI does not set or change menu prices and that franchisees make their own pricing decisions.

The Illinois plaintiff is seeking to represent a class that could include millions of McDonald’s customers, according to Reuters.

MCD Price Action: McDonald’s shares were up 0.39% at $233.94 during premarket trading on Tuesday. The stock is near its 52-week low of $229.20, according to Benzinga Pro data.

Photo via Shutterstock 

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McDonald's Today

$232.06 +0.23 (+0.10%)

As of 10/2/2026 03:59 PM Eastern

This is a fair market value price provided by Massive. Learn more.

$229.61▼

$341.753.21%

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September delivered mixed signals for McDonald’s NYSE: MCD shareholders, including a landmark dividend achievement, before the stock opened October by falling to a fresh 52-week low.

On Sept. 17, the board of the fast food restaurant chain declared a quarterly cash dividend of $1.93 per share, marking a 4% increase and the company’s 50th consecutive year of raising its payout.

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According to Executive Vice President and Global Chief Financial Officer Ian Borden, the “milestone is the result of decades-long commitment to maintaining [McDonald’s] financial discipline and rewarding [its] shareholders."

But lately, those shareholders haven’t been feeling all that rewarded. After joining the elite Dividend Kings club, the stock hit a fresh 52-week low of $229.61 on Oct. 1, reaching prices not seen since September 2022.

Now, the nearly $164 billion market cap company is hoping a multi-year strategic plan can win back consumers and serve as the catalyst to restore investor confidence.

McDonald’s > NEXT: The Fast Food Giant’s Comeback PlanThe fast food industry’s recent struggles have been well-documented. In August, Restaurant Business Magazine’s Jonathan Maze wrote that while McDonald’s same-store sales increased 0.8% in Q2, traffic to its restaurants declined.

Affordability continues to be the main challenge. Maze noted that “McDonald’s lost sales from lower-income consumers totaled $310 million last quarter alone.”

That, among other factors, has tempered growth expectations for the industry at large. According to consultancy firm Grand View Research, the global fast food market is forecast to undergo a 5% compound annual growth rate (CAGR) between 2022 and 2029.

Domestically, the outlook is worse. The U.S. fast food market is expected to see a CAGR of just 3.9% between 2022 and 2028.

McDonald’s is already planning to address its own growth and productivity challenges. On June 1, the company launched a new multiyear strategic plan called McDonald's > NEXT, which it hopes will usher in its next era of productivity and growth.

The $8.5 billion plan calls for revamping employee training programs for the chain’s approximately 2 million workers, investing billions into upgrading franchisees’ equipment and technology—including advanced back-of-house operational systems and AI-enabled tools—improving dining room spaces, and aiming for higher food quality.

Of that dollar amount, McDonald’s has earmarked $5 billion to be spent through 2030 on a combination of rent relief and capital support. In his Q2 earnings call comments, CEO Chris Kempczinski said the new growth strategy has a singular objective: to make McDonald’s the first choice for more customers, more often.

Despite Ambitious Plans, McDonald’s Still Faces Structural ChallengesOn Sept. 23 at its investor day, the company laid out plans for two connected tools that are critical components of its McDonald’s > NEXT initiative.

The first is a pricing engine that combines transactional data and local market data to make restaurant- and item-level price recommendations while ultimately leaving pricing decisions up to franchisees.

The second is a customer-engagement engine that will personalize experiences through offers and rewards to encourage its existing 220 million 90-day active loyalty members to visit more frequently and upgrade to higher-priced items.

McDonald’s hopes that the initiative will result in a 1.5% gain in market share in both the chicken and beverage categories by 2030, while maintaining its leadership position in beef and expanding operating margins to the low-to-mid 50% range by 2030, with a 2.5% increase in gross restaurant-level efficiency. The company currently enjoys high margins, and how much its new strategic plan can increase them is yet to be determined.

Another perhaps more pressing issue is the aforementioned disconnect between pricing and lower-income customers. AI-informed pricing recommendations alone will not sufficiently address record-high ground beef prices, ongoing inflation, and the subsequent fallout for fast food chains.

After decades of establishing brand loyalty through value menu offerings, McDonald’s has been trying to rebuild its value proposition as lower-income consumers pull back. The cost of a Big Mac in 2000 was approximately $2.24, or $4.27 in today’s dollars. Yet the average price of a Big Mac in 2026 is closer to $7, while a Big Mac combo meal with fries and a drink can run as high as $18.

In doing so, McDonald’s has been able to squeeze more profit per transaction from middle- and higher-income consumers who have been willing to absorb those price hikes, while abandoning the lower-income staple of its customer base.

McDonald’s Needs a Fix, and AI Might Not Be the AnswerIf McDonald’s > NEXT is the company’s answer to its recent troubles, it has some heavy lifting to do. In Q2, revenue growth slowed to 3.74% after registering 9.42% in Q1 and 9.71% in Q4 2025. Meanwhile, net income growth slowed to 4.84%.

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McDonald’s also pushed its target of reaching 50,000 global locations to 2028 from 2027, attributing the delay to inflationary development costs and a pressured consumer environment.

The company’s financial health, as measured by TradeSmith, has been in the red zone for over five months, and while the stock’s forward price-to-earnings ratio of 17.99 may suggest it is undervalued to some investors, recent price action remains bearish.

Short interest stands at just 1.73% of the float, but in dollar terms, that equates to $3.08 billion worth of MCD, which remains near multi-year highs. At the same time, corporate insider buying has dried up, with no insider purchases reported over the past 12 months. Institutional activity, however, has remained net positive. Institutional buying totaled $16.40 billion from 2,170 buyers over the trailing 12 months, compared with $8.78 billion in outflows from 1,741 sellers, while insider buying stood at zero over that period. Shares are down around 24% year to date, including a more than 32% slide from their all-time intraday high of $341.75 on March 2.

Should You Invest $1,000 in McDonald's Right Now?Before you consider McDonald's, you'll want to hear this.

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McDonald’s is preparing to test hand-breaded chicken menu items in nearly 200 restaurants across the US and Ireland next year, its latest attempt to win back inflation-battered consumers.

The world’s largest fast-food chain has already been selling hand-breaded chicken nuggets, strips and sandwiches across a handful of stores in the Chicago area, as well as 10,000 locations across Asia. 

It’s part of McDonald’s plan to snatch market share from competitors like Chick-fil-A and Raising Cane’s, both of which hand-batter and -bread chicken daily in restaurants around the country. 

McDonald’s is preparing to test hand-breaded chicken menu items in nearly 200 restaurants across the US and Ireland. Getty Images Hand-breaded chicken items are “a significant opportunity to upgrade taste and quality,” executive vice president Jill McDonald said during the company’s investor presentation last week.

But it can be difficult to add fresh breaded chicken to a chain like McDonald’s, whose customers have come to expect speedy service behind the counter, as Bloomberg previously reported. The fresh food requires new equipment, additional workstations and a more complex cooking process.

McDonald’s last week unveiled a multi-year, $8.5 billion spending plan that included a focus on chicken products, as consumers have shunned rising beef prices. The chain aims to gain 1.5 percentage points of market share in chicken products by 2030.

One of the main challenges will be finding room for new equipment in McDonald’s restaurants. The chicken will arrive at restaurants raw, marinated and frozen, so locations will need to add thawing cabinets.

Restaurants also need to add a separate work station for employees to batter and bread the chicken, which will then be sent off to the fryers. 

Currently, McDonald’s nuggets arrive at stores breaded, frozen and partially cooked – so all workers need to do is drop the morsels of poultry goodness in a deep fryer and then toss them in cartons.

It takes not only more space, but more time to hand-bread chicken, too. 

It’s part of McDonald’s plan to snatch market share from competitors like Chick-fil-A and Raising Cane’s. Bloomberg via Getty Images Workers who handle raw chicken won’t be able to help with other tasks behind the counter, like putting together the sandwiches, because of contamination risks – so the concern is that franchisees will need to ramp up labor hours.

McDonald’s noted that its spending plan – known as “NEXT” – includes improvements in operations and efficiencies. The goal is for labor in McDonald’s locations to be redistributed so restaurants don’t need to add more workers behind the counter to handle the breaded items, the company said.

A new AI program called ArchIQ, which has already been rolled out to 8,000 joints in China, will also take customers’ orders at drive-thrus and “free 50 hours of labor each week,” according to Brian Rice, the company’s executive vice president of technology.

It’s still an uphill battle for the fast-food chain. Burger King, for example, scrapped a hand-breaded chicken sandwich four years ago after it found the recipe entailed too much chaos to implement across restaurants.

A new AI program called ArchIQ will also take customers’ orders at drive-thrus. Bloomberg via Getty Images McDonald’s said it is working with franchisees to address concerns and that any broader roll-out of the new chicken items depends on the success of the pilot program.

The NEXT program also includes new flavors of Chicken McNuggets and refined cooking times and oil volumes, so existing chicken products on the menu taste even better, according to Jill McDonald.

It’s expected to cost US franchisees about $800,000 to implement the new program changes over several years. McDonald’s will be helping with $8.5 billion in cash and rent breaks, though the level of support will vary by operator. 

The company also plans to open another 2,100 restaurants globally this year. McDonald’s currently has more than 13,700 locations in the US, with the vast majority run by franchisees.

It expects the new restaurants to contribute about 2.5% of systemwide sales growth in 2027, and around 2% by 2030.

McDonald’s stock is down more than 23% so far this year.

Key Takeaways McDonald's beverage platform has met or exceeded expectations in the U.S., Canada and Germany.More than half of beverage traffic comes after lunch, while checks run about 50% above the daily average.Germany saw incremental gains in guest counts, sales and restaurant-level cash flow from the full lineup. McDonald’s Corporation (MCD - Free Report) is looking beyond its traditional burger-and-fries business to beverages as a potentially meaningful source of incremental growth. The company’s new beverage platform, launched in May 2026, has generated encouraging early results across the United States, Canada and Germany, with Australia joining the rollout in mid-July. Management said performance has generally met or exceeded initial expectations across these markets.

The opportunity is particularly compelling because beverages can create incremental visits during underutilized dayparts. More than half of traffic associated with the new platform is occurring after lunch, when McDonald’s restaurants typically have lower volumes and greater capacity. Moreover, strong food attachment has lifted average checks, which management said are roughly 50% above the company’s full-day average for these beverage transactions.

Germany offers an early indication of the broader opportunity. The market introduced the full lineup of cold coffee, crafted sodas, refreshers and energy beverages, generating meaningful incremental contributions to comparable guest counts, sales and restaurant-level cash flow.

The platform also fits squarely within the McDonald’s > NEXT strategy. Management said U.S. beverage sales are ahead of plan, while higher guest checks, new daypart occasions and strong food attachment are reinforcing momentum. More importantly, McDonald’s views beverages as a baseline growth platform capable of delivering multiple years of opportunity and plans to extend it into additional markets.

With more than 45,000 restaurants across over 100 countries, McDonald’s has the scale to broaden successful beverage concepts rapidly. If early traffic, check and cash-flow gains persist as the rollout expands, beverages could become a meaningful new global growth wave for the company.

How Rivals SBUX and CMG Are Expanding Beverage OpportunitiesMcDonald’s is not alone in targeting beverages as a way to create new occasions and drive incremental traffic. Starbucks Corporation (SBUX - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) are also leaning on beverage innovation to support growth.

Starbucks is expanding its Refreshers platform, which delivered double-digit U.S. revenue growth in the third quarter of fiscal 2026. Customizable energy offerings, new flavors and planned sparkling beverages are helping the company target both morning and afternoon occasions, with management viewing Refreshers as an important tool for expanding the afternoon daypart.

Chipotle is accelerating menu innovation across proteins, sides, desserts and beverages, with management identifying beverages as an area with significant untapped potential. The company is developing new beverage concepts as it looks to broaden customer occasions and give guests more reasons to visit. Management expects some of its broader menu innovations to reach restaurants in the second half of 2026 and into 2027.

MCD’s Price Performance, Valuation & EstimatesMcDonald’s shares have lost 13.1% in the past three months, outperforming the Zacks Retail - Restaurants industry, but underperforming the broader Retail and Wholesale sector and the S&P 500 index.

MCD Three-Month Price Performance

Image Source: Zacks Investment Research

In terms of its forward 12-month price-to-earnings ratio, MCD is trading at 17.27, down from the industry’s 19.94.

MCD P/E (F12M)

Image Source: Zacks Investment Research

MCD’s earnings estimates for 2026 and 2027 have trended downward in the past seven days. The revised estimates for 2026 and 2027 imply year-over-year growth of 5.3% and 7.2%, respectively.

MCD Estimate Trend
Image Source: Zacks Investment Research

MCD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

McDonald’s is increasingly using artificial intelligence to guide menu prices across the U.S. and some global markets, a plan that aims to boost headquarters’ profit but risks alienating customers and attracting antitrust scrutiny.

One pricing factor supercharged by AI: an estimate of how much each store's patrons are willing to pay.

The details of how that pricing system works, its extensive use of AI, the company’s regulatory concerns and the tensions with its franchisees haven’t been previously reported. For this story, Reuters reviewed screenshots of the company ​pricing engine taken in August and interviewed nine sources with first-hand knowledge of the burger chain’s strategy.

McDonald’s pricing engine uses machine-learning algorithms to continually analyze data from millions of daily transactions across McDonald’s nearly 14,000 restaurants and generate what the company calls “the optimal price” at each location for each menu item, from Big Macs ‌to discounted coffee for seniors.

The engine has widened existing price differences for the same product between restaurants, including from neighborhood to neighborhood within the same area, three franchisees told Reuters.

Screenshots of the interface franchisees use, reviewed by Reuters, show messages including: “Your restaurant is showing MEDIUM SENSITIVITY to Price” based in part on “customer willingness to pay in your area.” The platform also contains public price information pulled from online menus of nearby restaurants of competitors including Wendy’s and Burger King. Those chains said they do not use AI in pricing decisions.

A Reuters check of prices in September on the McDonald’s mobile app showed price differences. For example, a company-run store in Fresno, California sells a Big Mac for $5.69, but another company-run restaurant two miles away sells the same sandwich for $6.89, a 21% premium. Reuters could not confirm if the price difference is the result of the price engine’s recommendations or other factors.

McDonald’s says its franchisees are free to ​set their own prices, but five store owners told Reuters the company pressured them to use the AI-pricing tools. A franchisee document from June reviewed by Reuters shows McDonald’s records franchisees’ deviations from the recommendations in detail.

In January, McDonald’s started requiring franchisees to be “constructively engaging with McDonald’s approved Pricing Consultant and Tools” as part of its new business standards, according ​to an internal communication sent to franchisees and reviewed by Reuters.

McDonald’s said in a statement costs and other factors vary across its stores, and that restaurants even a few miles apart can belong to distinct markets.

Its pricing portal is “a tool, not a mandate, designed to provide restaurant-specific recommendations ⁠to help franchisees deliver value for customers and make informed business decisions,” McDonald's said. The company also described Reuters reporting as “speculative and uninformed” claims that “attempt to recast a standard business practice as something controversial.”

Other fast food companies are turning to AI to help with pricing and other operations, including Yum Brands, the world’s largest restaurant company by location count, which owns the KFC and Taco Bell brands. ​Yum did not immediately respond to a request for comment.

In a meeting with investors on Wednesday, McDonald's said its "industry-leading" pricing engine was important to a larger corporate bet on affordability, and that franchisees see the need for inexpensive menu items to lure low-income consumers.

McDonald's deeper push into AI pricing has potential regulatory and reputational risks.

Other consumer companies have faced swift public backlash after disclosures that they may use ​algorithms to price the same product differently.

Wendy’s endured a wave of criticism over the potential for unfair price fluctuations in 2024 after its CEO announced plans to test “dynamic pricing.” Wendy’s said its comments were misconstrued and told Reuters it did not implement the system. Instacart in December ended its use of AI tools that showed different grocery prices to different shoppers in a limited test, after a study disclosing the practice sparked criticism from consumers and lawmakers. Instacart said it will never use personal information to determine item prices.

“It’s in the interest of the company to know where there’s (customer) demand and to get that feedback in real time,” said Brooklyn resident Diane Bezucha. But if that technology is used to raise prices simply because of more demand, “that doesn’t really help me as a customer.”

As the use of AI becomes more widely adopted, U.S. courts and regulators are scrutinizing whether certain algorithmic pricing practices can ​facilitate illegal coordination between competitors – which franchisees are sometimes considered.

McDonald’s cautions that franchisees accessing its pricing engine portal risk scrutiny related to antitrust prohibitions because its restaurant owners “may be competitors,” according to screenshots of the legal terms for the portal Reuters reviewed in August.

THE MAKING OF AN $18 BIG MAC
In 2023, McDonald’s CEO Chris Kempczinski told investors that McDonald’s had developed proprietary tools to evaluate pricing at individual ​restaurants.

That same year, the pricing tools suggested to Connecticut franchisee George Michell that he charge about $18 for a Big Mac meal sold off a state turnpike, according to the restaurant owner’s lawsuit alleging that the brand tried to push him out of the franchisee system for discriminatory reasons. Reuters could not independently establish what the tool recommended to Michell.

McDonald’s has disputed the lawsuit and said Michell repeatedly breached his franchise agreements. Although ‌the price went viral ⁠and sparked widespread consumer outrage, the price “caused no loss of sales” at the restaurant, according to a filing from the franchisee in December. The case is ongoing, but courts have dismissed claims related to McDonald’s breach of contract.

Some franchisees say the engine recommended large price increases during the pandemic and afterwards, as inflation soared. But in recent months the engine has pushed more conservative pricing – including some decreases – causing friction between franchisees and corporate headquarters. McDonald’s has used some form of an AI pricing tool since at least 2019.

Pushing lower prices to attract more customers and lift sales can boost the corporation’s bottom line because the headquarters makes the vast majority of its money from taking a percentage of its franchisees’ total revenue – regardless of individual-store profit margins. Franchisees, by contrast, have stronger incentives to raise prices to help cover the rising wages, rent and other restaurant expenses, which are up 36% since 2019, the National Restaurant Association estimates.

Despite the engine’s consumer-friendly push for more conservative pricing, U.S. foot traffic at McDonald's has declined year-over-year for every complete month since March, according to estimates from data analytics firm Placer.ai.

MCDONALD’S TRACKS ‘PRICING NON-COMPLIANCE’ BY FRANCHISEES
McDonald’s sends AI pricing guidance to franchisees at least three times a year, company ​documents show.

One former franchisee said she didn’t feel compelled to take the prices but five others ​described various forms of pressure from the company to use them. Karen King – a ⁠former store owner who retired from the franchise system last summer – and other franchisees described phone calls from corporate officers to discuss pricing when they strayed from those recommendations.

“You don’t really have much of a choice anymore” about pricing, King said. McDonald’s did not address her specific claims.

McDonald’s has power over decisions that can make or break a franchisee’s business, such as their eligibility to renew or open new stores. CEO Kempczinski told investors in August that, because of recent changes to the way the company conducts business reviews of its franchisees, “pricing non-compliance in certain cases is part of those conversations.”

At the ​same time, the company also warns the system may create potential legal risk for owners. The pricing portal’s terms of service warn that owners “may be competitors of each other” and therefore “it is particularly important for all Users of the Tool to understand and comply fully with ​anti-trust and competition laws.” The terms say that for additional ⁠guidance, franchisees should consult with their own attorneys. The document also says franchisees are “always free to determine the final price.” Reuters reviewed the pricing portal’s terms of service in August.

That language is “an acknowledgment there’s a potential problem” given recent scrutiny of pricing algorithms by the Federal Trade Commission and other antitrust regulators over collusion concerns, said William Kovacic, director of the competition law center at George Washington University and a former commissioner of the Federal Trade Commission appointed by Republican President George W. Bush.

Other experts countered that the legal and regulatory risk to McDonald’s is low because the competitors are franchisees, and courts in recent decades have given wide latitude for brands to exert control over their franchisees' pricing.

McDonald’s said in a statement it takes antitrust compliance seriously and that the guidance in its terms of service is not evidence of anticompetitive behavior.

The FTC ⁠and the U.S. Department ​of Justice, which also enforces antitrust regulations, did not respond to a request for comment.

HOLDING THE LINE ON SUMMER ICE CREAM PRICES
McDonald’s influences the pricing engine’s recommendations by working closely with Tiger Analytics, which runs the AI platform, according to ​two former Tiger employees. The former employees said McDonald’s regularly provided rules and corporate targets, such as attracting more customers or boosting profits. Tiger declined to comment on its work for McDonald’s.

Examples of McDonald’s parameters for the price engine included, according to the two employees: focusing increases on menu items that have not had a price increase in at least two years; only increasing prices on items that have had recent price increases in at least 30% of stores; excluding ice creams ​and drinks from price increases during summer months.

Some franchisees, facing rising costs, resist such guidance. At the company’s August earnings call, CEO Kempczinski called out store owners who didn’t comply with the chain’s under-$3 menu pricing guidance – about a third of total franchisees. He said their “business results (were) a lot softer” without disclosing how the company reached that conclusion.

McDonald's just raised its dividend again even as its stock hit a multiyear low and U.S. foot traffic turned negative. The reason has almost nothing to do with selling burgers.

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Shares of McDonald’s (NYSE:MCD | MCD Price Prediction) have fallen 21.1% year to date to $236.51, and Business Insider reported the stock hit a multiyear low after investors shrugged at a restaurant makeover plan. Yet on September 17, 2026, the board declared a quarterly dividend of $1.93, up from $1.86. That confidence rests on landlord math more than burger math.

Franchisees Pay the Rent That Pays You Franchised restaurants generate roughly 90% of restaurant margin dollars. In Q2 2026, franchised revenue reached $4.393B, up 4%, versus $2.525B, up 3% from company-operated stores. Franchised revenue is rent and royalties tied largely to sales. When an operator’s food and labor bills climb, McDonald’s still collects its cut of the top line. That structure explains a 46.1% operating margin. CFO Ian Borden framed it on the August 4 call:

“In the second quarter, we generated more than $4 billion in restaurant margins, and our year-to-date adjusted operating margin was 46.9%, highlighting the resiliency of our business model.”

The mix is shifting further toward franchising. Management said company-owned restaurant sales occurred in the quarter and are expected to continue in 2026 and beyond.

Free Cash Flow Covers the Check In 2025, McDonald’s produced $10.551B of operating cash flow and $7.186B of free cash flow after $3.365B in capex. Dividends cost $5.115B, alongside $2.056B in buybacks. Q2 2026 followed the pattern: $2.81B of operating cash flow against $834M of capex and $1.317B in dividends.

Stress tests matter. In the June 2020 quarter, operating cash flow was negative $213.1M while dividends totaled $929.7M. The quarterly rate still rose from $1.25 to $1.29 that year.

Debt Is the Price of the Landlord Model Buybacks and leverage have pushed shareholders’ equity to negative $1.79B. Interest expense hit $1.582B in 2025, and management guides 2026 interest expense up 4-6%. Even so, the quarterly dividend has climbed from $0.375 in 2008 to $1.93, with an increase in every year of the record (the kind of multi-decade raise run we screened for in our free Dividend Kings guide).

How Yum! Brands and Burger King’s Parent Stack Up Yum! Brands (NYSE:YUM) and Restaurant Brands International (NYSE:QSR) also run heavily franchised systems, collecting royalties from KFC, Taco Bell, Burger King and Tim Hortons operators. McDonald’s adds a property layer, controlling much of the land under its restaurants and charging franchisees rent on top of royalties. That second stream gives it a stronger floor than its asset-lighter peers, though it also demands higher capex, guided at $3.7-$3.9B for 2026.

Where the Soft Spot Sits Royalties still track franchisee sales. Global comps slowed to 1.3% in Q2 from 3.8% a year earlier, U.S. comps rose just 0.8%, and Borden said U.S. comps were slightly negative in July. CEO Chris Kempczinski admitted execution slipped:

“If it looks great on paper but you can’t execute it, it doesn’t matter.”

U.S. operators remain healthy, he added: “When we look at their balance sheets, they’ve got a lot of borrowing capacity still.”

Verdict: Durable Payout, Thinner Growth Cushion The dividend is durable. The stock yields about 3.06%, the forward annualized payout is $7.72, and 2025 free cash flow covered dividends with room to spare. The real threat is a extended U.S. traffic slump that drains franchisee profits, strains their borrowing capacity and forces rent relief, all while interest costs rise on a balance sheet with negative equity. Keep an eye on Investor Day refranchising details and U.S. comps through year-end.

Contact [email protected] for any questions or corrections.

McDonald's (MCD -0.22%) faces an uphill battle as inflation continues to squeeze more people's wallets. Investors are privy to this detail, with the dividend stock down by more than 20% this year.

The situation has pressured McDonald's over the past five years, and it also puts the stock roughly $100 below its 52-week high. Some investors view dips as buying opportunities, but that may not be the case for McDonald's.

Image source: Getty Images

McDonald's doesn't have much pricing power McDonald's built an iconic fast food restaurant chain by catering to consumers who want cheap food. When that cheap food gets more expensive, it's easier for consumers to consider alternatives, and rising prices have created more tension amid broad inflation.

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Low-income consumers have been pulling back on McDonald's purchases. This segment saw a double-digit year-over-year drop in 2025 and also decreased this year.

The glaring red flag is that second-quarter comparable sales only increased by 0.8% year-over-year in the U.S., which is the company's largest market. Meanwhile, the Consumer Price Index increased by 3.4% year-over-year.

McDonald's comparable sales growth is not keeping up with inflation, and with comparable sales from international operated markets up by 1.5% year-over-year, the company has limited options to reignite growth.

Price hikes aren't a good option when McDonald's caters to lower-income consumers and has used low prices as a major selling point for many years. Furthermore, operating income only inched up by 3% year-over-year, showing that the company has limited options for boosting its profit margins.

Franchisees are feeling the pain McDonald's doesn't just sell fast food. It also buys real estate and leases some of its locations to franchisees. Those franchisees either pay monthly rent or a percentage of sales.

This business model was a key reason McDonald's became the most recognizable fast food restaurant chain. However, those same store owners are facing sharply rising costs amid sluggish growth rates.

McDonald's acknowledged this is an issue upon announcing its NEXT initiative. Part of this strategy includes providing $5 billion to franchisees through 2030, "through a combination of rent relief and capital support."

That's more than half of McDonald's full-year profits, which will be distributed through 2030. It's also part of a larger $8.5 billion commitment through 2036.

A survey from the National Owners Association found that 95% of franchisees reported declining year-over-year profitability in Q1, with nearly universal agreement that McDonald's current plan for increasing cash flow is not working.

Approximately 80% of survey respondents said their cash flow is "not sufficient to support required reinvestment obligations."

It's no wonder McDonald's announced its NEXT initiative, which looks more like a preservation mission than a long-term growth opportunity. If operators continue to feel the pinch and have long-term doubts, they may look for an exit, and the 0.8% boost in U.S. comparable sales may not be enticing enough for aspiring franchisees to do business with McDonald's.

McDonald's has shed a fifth of its value in 2026 while its franchise machine keeps printing billions in free cash flow, and that tension puts investors in an uncomfortable spot where both buying and selling carry a real cost.

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At $237.04, McDonald’s (NYSE:MCD | MCD Price Prediction) sits in a balanced risk-reward zone. The stock has shed roughly a fifth of its value in 2026 as U.S. traffic softens and franchisee margins tighten, but the long-term franchise machine remains intact.

McDonald’s operates 46,028 systemwide restaurants with a heavily franchised model generating roughly 90% of restaurant margin dollars from franchisees. That model has produced decades of reliable free cash flow, but the current slowdown exposes a vulnerability: the company is caught between value-resistant low-income diners and franchise operators facing sticky input costs.

Why the Selloff Looks Overdone Bulls point to a business still throwing off cash and expanding globally. Fiscal 2025 delivered operating cash flow of $10.551 billion and free cash flow of $7.186 billion, funding $2.0 billion in buybacks and a recent 5% dividend raise to $1.86 quarterly. At a P/E near 19 and 3.05% dividend yield, MCD trades below its multi-year average multiple.

The loyalty program is underappreciated: nearly 220 million 90-day active users generating over $40 billion in trailing systemwide sales. International markets and the new beverage platform, running about 50% above the full-day average check in lead markets, are outperforming.

Where the Squeeze Really Hurts Bears see a value proposition losing its grip. Global comparable sales decelerated to just 1.3% in Q2 2026, down from 3.8% in Q1 and 5.7% in Q4 2025. U.S. comps grew only 0.8% with negative guest counts. Management admitted “we made a bad trade in Q2” on the under-$3 McValue menu, and roughly a third of the U.S. system did not execute the program as designed.

Consumer sentiment sits at 55.2, below the 60 threshold associated with recessionary behavior. SG&A jumped 17% in Q2, and management pushed its 50,000-restaurant target from 2027 to 2028. A full marketing recovery is not expected until 2027.

Why Patience Beats Conviction Right Now Both cases have merit at this price. Franchise economics, loyalty scale, and international momentum argue against selling into a cyclical wobble. But U.S. execution must stabilize before a durable rerating begins, and management flagged that Q3 marketing changes will be limited because the calendar was already in flight.

Price, Target, and Performance Snapshot MCD trades at $237.04, down 20.92% year to date. The S&P 500 is up 12.52% year to date, a striking gap for a Dow component with steady cash generation.

Valuation is undemanding: P/E near 19, free cash flow yield of 4.28%, and 3.05% dividend yield. Operating margins remain elite at 46.1%.

At $237.04, McDonald’s presents a balanced risk-reward profile.

The path to a rerating runs through U.S. execution under new USA president Skye Anderson, and management itself signaled that the marketing program will not be fully back until 2027. Buying today anticipates a turnaround that has been explicitly deferred. Selling today locks in a loss on a franchise that still generates over $7 billion in annual free cash flow and continues to grow its unit base toward 50,000 restaurants by 2028.

The cost of patience is modest. The dividend yield exceeds 3% and the buyback is active. Watch U.S. comparable sales inflecting positive, guest counts stabilizing, and beverage platform contribution scaling. A clean Q4 earnings report with positive U.S. traffic would strengthen the bull case. Another deceleration in global comps combined with company-owned margin compression would reinforce the bear case.

McDonald’s will wiggle its way out of this squeeze, but the wiggle takes time, and paying up before U.S. execution proves out is premature while doing nothing is nearly free.

Contact [email protected] for any questions or corrections.

McDonald's Corporation (MCD) Analyst/Investor Day September 23, 2026 9:30 AM EDT

Company Participants

Dexter Congbalay - Vice President of Investor Relations
Christopher Kempczinski - Chairman President, & CEO
Jill McDonald - Executive Vice President & Global Chief Restaurant Experience Officer
Skye Anderson - President of McDonald's USA
Morgan Flatley - Executive VP and Global Chief Marketing Officer & New Business Ventures
Manuel Steijaert - Executive VP & President of International Operated Markets
Dario Baroni - Senior VP & President of International Developmental Licensed Markets
Brian Rice - Executive VP & Global Chief Information Officer
Tiffanie Boyd - Executive VP & Global Chief People Officer
Ian Borden - Executive VP & Global CFO

Conference Call Participants

Andrew Charles - TD Cowen, Research Division
Danilo Gargiulo - Bernstein Institutional Services LLC, Research Division
Dennis Geiger - UBS Investment Bank, Research Division
Brian Harbour - Morgan Stanley, Research Division
Lauren Silberman - Deutsche Bank AG, Research Division
John Ivankoe - JPMorgan Chase & Co, Research Division
Jacob Aiken-Phillips - Melius Research LLC
Christopher O'Cull - Robert W. Baird & Co. Incorporated, Research Division
Peter Saleh - BTIG, LLC, Research Division
Sara Senatore - BofA Securities, Research Division

Presentation

Operator

Please welcome Vice President of Investor Relations, Dexter Congbalay.

Dexter Congbalay
Vice President of Investor Relations

Good morning, and welcome to McDonald's 2026 Investor Day. Thank you to everyone for joining us, whether here at our headquarters in Chicago or via our live stream. Just a couple of housekeeping items before we get started.

As many of you are aware, we issued a press release this morning summarizing highlights from today's presentation. We'll post key slides from the presentation on our website. Also, please note that the forward-looking statements in our press release and 8-K filing also apply to our comments in the presentation today.

Those documents will be available on our website as well reconciliations of non-GAAP financial measures

watch now

McDonald's is predicting that flat traffic and higher inflation will continue to weigh on the restaurant industry, CEO Chris Kempczinski said on Wednesday.

"One of the things I've talked to our team about is we need to stop talking about that being a difficult environment, and just say that is the environment," Kempczinski said on CNBC's "Squawk on the Street." "Because I think, as we look out forward, we're not expecting things to change."

For years, Kempczinski has been warning investors and analysts about the "challenging environment" faced by McDonald's and the broader industry. The burger chain reported U.S. same-store sales growth of just 0.8% in its most recent quarter as traffic to its domestic restaurants fell.

Diners have been eating out less frequently, pushing back against higher menu prices as they face increased costs on everything from gas to groceries. From August 2025 to July 2026, industry operators surveyed by the National Restaurant Association reported a net decline in customer traffic in every month but one.

To attract customers, McDonald's and its rivals have leaned into discounts. But diners aren't the only ones facing higher costs.

Restaurant operators — like McDonald's and its franchisees — have seen beef prices soar. Kempczinski said that beef costs have nearly doubled over the last five years in the company's biggest markets. Other expenses, like labor and construction, have also ticked higher, putting more pressure on margins.

"Across the board, we're seeing that inflation is sticky," Kempczinski said. "It's sticky, not just in the U.S., but around the world."

Faced with tougher operating conditions, McDonald's is focusing on stealing diners from its rivals.

"The biggest thing that you need to do in an environment like this is you have to be able to earn share," Kempczinski said. "You have to be able to actually grab growth from your competitors."

While he said McDonald's will likely have to consider price increases, he added the chain will have to be careful not to drive diners away. He reiterated that the company believes it erred by raising prices too quickly in the years after the Covid pandemic.

Kempczinski and other McDonald's executives will share more details about the company's plans to gain market share during its investor day on Wednesday.

McDonald's is expected to share more details about its new strategy to win back diners at its investor day on Wednesday in Chicago.

The company unveiled its new global growth plan, called McDonald's > NEXT, in June at its biennial worldwide convention for franchisees. Pillars of the strategy include a new restaurant design, better-tasting food and drinks and consumer-led innovation. But executives have otherwise offered few details, holding back until Wednesday's event.

Nearly three years after McDonald's previous investor day, the presentation comes after McDonald's U.S. business disappointed in its most recent quarter. The chain's same-store sales increased just 0.8%, and traffic to its restaurants fell.

CEO Chris Kempczinski said that the problems were due to shortcomings in execution, like a mixed implementation of its value offerings, rather than issues with the chain's overall strategy. Skye Anderson, who was tapped as president of McDonald's U.S. business in the wake of the weak quarter, will likely speak on Wednesday.

Kempczinski, Anderson and the rest of the McDonald's executive team will have to win over investors, who are increasingly skeptical that the fast-food giant can win over diners in the near term.

Over the past 12 months, the stock has fallen 18%, dragging McDonald's market value down to about $175 billion. The S&P 500 has climbed 16% in the same period, as optimism about artificial intelligence has offset concerns about the financial health of consumers.

Here's what McDonald's presentation is expected to cover:

1) Value strategyOver the past two years, value has become all-important to restaurants, which are competing over a smaller pool of customers who care about both price and experience. While chains like Taco Bell and Chili's have thrived, McDonald's has struggled recently as its value offerings got lost among its other promotional messages.

Plus, its franchisees have pushed back against discounts, which grow sales but eat into operators' profits, especially as high beef prices raise expenses. Only about two-thirds of McDonald's U.S. franchisees implemented its recent "under $3 menu," executives said in August. For its part, McDonald's lets franchisees set their own prices, but the company assesses how operators' menu prices help deliver value.

Analysts expect that McDonald's will continue to emphasize value, and franchisees' cooperation will be key to its success.

"We expect MCD to use this event to make it clear to franchisees that adherence to pricing recommendations will be a key factor in evaluating agreement renewals," Citi Research analyst Jon Tower wrote in a note to clients with his investor day predictions.

Tower also cut his price target for the company to $310 per share from $345 a share, citing investor concerns about franchisees' buy-in for the company's overall strategy.

2) Menu updatesBesides value, McDonald's is also looking to attract diners through menu offerings with elevated taste and quality.

In recent years, McDonald's has shifted its menu to include more chicken options, as beef prices have risen and rivals like Chick-fil-A threaten its sales. At the franchisee convention, executives shared that the next evolution of its chicken offerings will be hand-breaded. Chick-fil-A, Raising Cane's and Popeyes all hand bread or batter their chicken rather than using a machine. The technique usually results in a crispier exterior, but it takes more time and labor.

In addition to chicken, McDonald's has also leaned into expanded beverage options recently. After winding down CosMc's, its drink-focused spinoff, McDonald's has rolled out a variety of beverage options in the U.S., including crafted sodas, refreshers and energy drinks. A handful of international markets, like Germany, have also been rolling out more drink offerings.

"What's important — we'll talk a lot more about this at investor day — is beverages," Chief Financial Officer Ian Borden said on the company's earnings conference call in August.

3) Restaurant remodelsRoughly every decade, McDonald's mandates that franchisees remodel their restaurants to fit new aesthetic guidelines and improve their technology and equipment.

And it looks like another round of restaurant renovations is coming as part of the growth strategy. At the convention, franchisees got the first look at the new restaurant design.

Typically, McDonald's chips in some support for franchisees who are remodeling their restaurants. While upgraded locations usually generate higher sales, operators have to fund the remodels at a time when borrowing costs are elevated. And thanks to tariffs and high energy prices, construction costs are increasing, too.

As a result of the remodel program, McDonald's capital expenditures could increase by $600 million to $900 million in 2027 and 2028 from its projected spending in 2026, according to a research note from BMO Capital Markets analyst Andrew Strelzik. But executives are expected to share the company's own projected costs for the remodel program at investor day.

4) Cost cutsWhile McDonald's will likely spend more on capital expenditures over the next two years, the company will likely try to cut costs elsewhere.

McDonald's will share its outlook for general and administrative spending during investor day, Borden said in August.

McDonald's could target G&A spending to be less than 2% of its systemwide sales, down from its current goal of 2.2%, Bernstein analyst Danilo Gargiulo wrote in a note to clients. In recent years, the company's workforce has shrunk as part of a reorganization effort.

Indirectly, McDonald's will also cut costs by refranchising some of its company-owned restaurants.

Selling locations to franchisees means that McDonald's will not be responsible for the operational costs or capital expenditures required to run a restaurant successfully. The company will also share more details about those plans at the investor day, according to Borden.

watch now

"A nickel ain't worth a dime anymore," said the late Yankee great, Yogi Berra, referring to persistent inflation. Fast forward 50 years, and the same might be said of fast food value menus.

McDonald's announced this week that it is revising its U.S. value strategy after recording its slowest sales growth in more than a year. Management is preparing a near-term "bridge plan" built around temporary menu items, national digital promotions and personalized offers aimed at loyalty members. A true return of the "Dollar Menu" is nearly impossible given food and labor inflation, but McDonald's doesn't necessarily need to recreate pricing from 20 years ago; it's not the same consumers anyway, and it just needs to restore the perception that customers get good value for their money

That perception has clearly deteriorated: the percentage of U.S. consumers who regard McDonald's as a good value reportedly fell from roughly 55% in 2020 to about 40% in 2024, according to a recent UBS study. There are plenty of stories about ludicrously overpriced "value meals" - one of the stories identified a McDonald's on I-95 in Connecticut just north of NYC, where my brother lives as the poster child for fast food inflation. Comparable sales rose only 0.8% in the second quarter, according to the company, while spending by households earning under $40,000 declined 2.4% according to transaction firm Numerator.

While McDonald's may be struggling to convince customers that its menu still represents value, its shares increasingly do. The stock is essentially unchanged in five years. McDonald's closed near $248.50, versus roughly $242.50 five years ago. Yet the business underneath each share has improved. The share count has declined about 5.25%, while projected 2026 revenue exceeds $28.2 billion, up from $23.2 billion in 2021. Estimated net income has risen to roughly $9.15 billion from $7.5 billion, and free cash flow is expected to approach $7.65 billion.

McDonald's, 5 years

The result is a company with higher sales, earnings, and cash flow, and because there are fewer shares, each share gets a bigger piece. A quarter pounder may weigh the same, but each share's share (that's a mouthful) of the sale is actually a little bigger. In this case, shrinkflation works for the investor. McDonald's is trading roughly 19.2 times forward earnings, versus nearly 25 times five years ago. The forward multiple is the cheapest it has been in the past ten years.

McDonald's isn't completely dependent on the bottom of the so-called "K-shaped" economy. Higher-income consumers eat there too (President Trump reportedly likes it). Consumers not visiting Mastro's or Ruth's Chris are not necessarily eating at home; many are moving down the restaurant ladder, where McDonald's scale, convenience, and digital ecosystem provide advantages, but only if they think they're getting a square meal at a square deal.

Three-month implied volatility near 23.5% is cheap compared with most stocks, but McDonald's has generally been a low-volatility stock. The ten-year average implied volatility is closer to 19%. So while simply buying calls outright may not appear expensive at first blush, a spread probably makes more sense given how the stock has historically behaved.

With MCD near $248.50, consider selling a three-month $230 or $235 put, using the proceeds to purchase the $250–$275 call spread. Adjust strikes to establish the position near "even"  (no net debit or credit). The trade expresses the view that the stock can recover toward $275 as value initiatives gain traction, while accepting the obligation to buy shares at an effective price meaningfully below today's closing price - below the five year lows.

The trade structure presents a bit of a value menu itself. If you simply bought the 250-strike call, you'd have to pay $13.50. But by selling both the 270-strike call and the 230-strike put, you've reduced your premium outlay to just just $2.12. Of course, selling that downside put will tie up margin. 

Disclosures: Tidal owns/holds all the securities mentioned in the article.

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Board declares quarterly cash dividend of $1.93 per share, an increase of 4%

Milestone reflects ongoing commitment to rewarding shareholders with five decades of durable growth and disciplined capital allocation

Company will provide further details on its next phase of growth at upcoming Investor Day on September 23, 2026

, /PRNewswire/ -- Today, McDonald's Board of Directors declared a quarterly cash dividend of $1.93 per share of common stock, a 4% increase over the Company's previous quarterly dividend. The dividend is payable on December 15, 2026 to shareholders of record at the close of business on December 1, 2026. The new quarterly dividend of $1.93 per share is equivalent to $7.72 annually.

With this increase, McDonald's marks a golden milestone with its 50th consecutive year of dividend increases, reflecting the durability of its business model, the resiliency of its cash flow, and a commitment to sustainable dividend growth. McDonald's is now proudly crowned as one of the "Dividend Kings," an elite group of fewer than 60 U.S. public companies that have raised their annual dividend for at least 50 consecutive years.

"This milestone is the result of decades-long commitment to maintaining our financial discipline and rewarding our shareholders," said Ian Borden, Executive Vice President and Global Chief Financial Officer. "It is also a reflection of the consistent hard work and partnership of our crew members, owner-operators and suppliers. We look forward to sharing more about our financial goals and next phase of growth at our upcoming Investor Day."

McDonald's will hold its 2026 Investor Day on September 23, 2026. The Company remains focused on delivering strong returns for shareholders through its consistent capital allocation philosophy of (i) investing in opportunities to grow the business and drive strong returns, including capital expenditures and investments in technology and other capabilities, (ii) prioritizing our dividend, and (iii) repurchasing shares with remaining free cash flow over time.

Upcoming Communications
For important news and information regarding McDonald's, including the timing of future investor conferences and earnings calls, visit the Investor Relations section of the Company's Internet home page at www.investor.mcdonalds.com. McDonald's uses this website as a primary channel for disclosing key information to its investors, some of which may contain material and previously non-public information.

About McDonald's
McDonald's is the world's leading global foodservice retailer with over 45,000 locations in over 100 countries. Approximately 95% of McDonald's restaurants worldwide are owned and operated by independent local business owners.

Forward-Looking Statements
This document contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from expectations are detailed in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's Form 10-Q for the quarter ended June 30, 2026. The Company undertakes no obligation to update such forward-looking statements, except as may otherwise be required by law.

SOURCE McDonald's Corporation

Key Takeaways McDonald's delivery generates more than $20B in annual systemwide sales across about 100 markets.MCD targets 30% of systemwide delivery sales through its app by the end of 2027.McDonald's nears one app, loyalty program and pricing engine across major markets, serving 220M users. McDonald’s Corporation (MCD - Free Report) has developed delivery into a sizable global platform, with the channel generating more than $20 billion in annual systemwide sales. The business has become an important component of the company’s digital-first strategy.

McDonald’s delivery reach extends across more than 41,000 restaurants in approximately 100 markets, representing about 90% of its global restaurant base. The company is also scaling the ability to place delivery orders directly through its mobile app and targets 30% of systemwide delivery sales originating from the app by the end of 2027.

McDonald’s describes its delivery operation as efficient and supported by an industry-leading cost structure. The channel represents one of the four strategic areas advanced under Accelerating the Arches, alongside digital, drive-thru and restaurant development. Since introducing the strategy nearly six years ago, McDonald’s has increased systemwide sales by approximately $40 billion and operating income by more than $3 billion.

The company is also strengthening the digital infrastructure across its global operations. McDonald’s is close to bringing its major markets onto one application, one loyalty program and one pricing engine. Its customer platform has nearly 220 million active loyalty users. The company expects its integrated systems to generate cost savings, accelerate innovation, strengthen security and improve stability.

How MCD’s Delivery Economics Compare With PeersStarbucks Corporation (SBUX - Free Report) continues to expand delivery as part of its broader digital and convenience strategy. In the fiscal third quarter of 2026, U.S. comparable sales increased 7.9%, supported by transaction growth of 4.2% and average-ticket growth of 3.6%. Sustained delivery strength contributed to the ticket increase, while Starbucks reported no meaningful cannibalization of in-store visits or current margin trade-off from the channel. The planned integration of delivery into the Starbucks app will allow customers to earn Stars on delivery purchases, supporting greater loyalty participation and reinforcing the role of first-party digital ordering within the company’s delivery strategy.

CAVA Group, Inc. (CAVA - Free Report) is strengthening delivery execution through technology and restaurant-level operational improvements. CAVA’s kitchen display system has improved service speed, order accuracy and productivity, supporting stronger third-party platform ratings and greater visibility among customers seeking shorter order lead times. However, a higher mix of third-party delivery primarily drove a 40-basis-point increase in other operating expenses to 12.8% of revenues during the second quarter of 2026. CAVA’s performance illustrates the potential for technology to support delivery growth while highlighting the importance of controlling the incremental costs associated with third-party orders.

For McDonald’s, the delivery platform has the scale, reach and operating structure to boost its next phase of digital growth. Progress toward the 30% in-app delivery-sales target, alongside the channel’s ability to maintain its efficient cost structure, will likely be key indicators of whether McDonald’s can build on its established delivery base.

MCD’s Price Performance, Valuation & EstimatesShares of McDonald’s have declined 16.4% over the past year compared with the industry’s fall of 8.4%.

MCD’s One-Year Price Performance
Image Source: Zacks Investment Research

From a valuation standpoint, MCD trades at a forward price-to-sales (P/S) multiple of 6.13, above the industry’s average of 3.12.

MCD’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for MCD’s 2026 earnings per share (EPS) implies a year-over-year rise of 5.6%. The EPS estimates for 2026 have declined in the past 30 days.

EPS Trend of MCD Stock
Image Source: Zacks Investment Research

MCD’s Zacks RankMCD stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A month has gone by since the last earnings report for McDonald's (MCD - Free Report) . Shares have lost about 4.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is McDonald's due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for McDonald's Corporation before we dive into how investors and analysts have reacted as of late.

McDonald's Q2 Earnings Beat on Franchised Margins, Sales MissMcDonald's reported second-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same.

McDonald's reported adjusted earnings per share (EPS) of $3.38, up 6% year over year, and beating the Zacks Consensus Estimate of $3.32 by 1.8%. Higher sales-driven franchised margins and other operating income supported the bottom line.

Revenues increased 4% year over year to $7.10 billion but missed the consensus mark of $7.14 billion by 0.5%. Global comparable sales rose with positive growth across all three operating segments.

MCD Posts Positive Comparable Sales Across SegmentsGlobal comparable sales increased 1.3% compared with 3.8% growth in the prior-year quarter. The United States recorded a 0.8% increase, driven by positive average check growth, including favorable product mix, partly offset by lower comparable guest counts.

International Operated Markets comparable sales rose 1.5%. Germany, Australia and the United Kingdom led the improvement, while France remained a drag. International Developmental Licensed Markets advanced 1.9%, supported by Japan and positive results across all geographic regions, partly offset by weakness in China.

McDonald’s Systemwide Sales Benefit From ScaleGlobal systemwide sales increased 5%, or 4% in constant currencies, to $37 billion. U.S. systemwide sales rose 2%, while International Operated Markets and International Developmental Licensed Markets increased 6% and 8%, respectively.

Loyalty remained an important demand driver. Across 70 loyalty markets, trailing 12-month systemwide sales to loyalty members increased more than 20% to $40 billion. The number of 90-day active loyalty users rose 13% to nearly 220 million at quarter-end.

MCD’s Q2 Revenue Growth Reflects Franchised StrengthRevenues from franchised restaurants increased 4% to $4.39 billion. U.S. franchised revenues rose 2%, International Operated Markets gained 5%, and International Developmental Licensed Markets and Corporate advanced 9%.

Sales from company-owned and operated restaurants increased 3% to $2.53 billion. U.S. sales declined 1%, while International Operated Markets rose 3%. Other revenues increased 6% to $182 million, reflecting contributions from technology-related fees and brand licensing arrangements.

McDonald’s Margins Rise Despite U.S. Cost PressureFranchised restaurant margins increased 4.3% to $3.71 billion and represented roughly 90% of total restaurant margin dollars. Growth reflected stronger sales across all segments and favorable currency translation in the international businesses.

Company-owned and operated restaurant margins rose 1.8% to $387 million. U.S. margins declined 6% to $91 million due primarily to ongoing inflationary cost pressures. International Operated Markets margins increased 3% to $285 million, as sales growth and currency benefits were partly offset by inflation.

MCD’s Operating Income Advances as SG&A ClimbsOperating income increased 3% to $3.34 billion, or 2% in constant currencies. Results included $52 million in pre-tax charges, primarily related to restructuring under the Accelerating the Organization initiative. Excluding current- and prior-year charges, operating income increased 4%.

Selling, general and administrative expenses increased 16.7% to $817 million. The rise primarily reflected higher employee costs, including incentive-based compensation, and expenses associated with the 2026 Worldwide Owner/Operator convention. Other operating income totaled $37 million compared with an expense of $29 million a year earlier, aided by higher gains on restaurant sales and excess properties.

MCD Maintains 2026 Expansion and Margin OutlookMcDonald’s expects net restaurant expansion to contribute about 2.5% to 2026 systemwide sales growth in constant currencies. The company continues to project a full-year operating margin in the mid-to-high 40% range and SG&A expenses of roughly 2.2% of systemwide sales.

Capital expenditures are expected between $3.7 billion and $3.9 billion. McDonald’s plans to open approximately 2,600 restaurants during 2026, generating about 2,100 net additions. Interest expense is projected to increase 4-6%, while the full-year effective tax rate is expected between 21% and 23%.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates revision.

VGM ScoresAt this time, McDonald's has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, McDonald's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry PlayerMcDonald's is part of the Zacks Retail - Restaurants industry. Over the past month, Cheesecake Factory (CAKE - Free Report) , a stock from the same industry, has gained 3.1%. The company reported its results for the quarter ended June 2026 more than a month ago.

Cheesecake Factory reported revenues of $1.03 billion in the last reported quarter, representing a year-over-year change of +7.7%. EPS of $1.44 for the same period compares with $1.16 a year ago.

For the current quarter, Cheesecake Factory is expected to post earnings of $0.87 per share, indicating a change of +27.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +5.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Cheesecake Factory. Also, the stock has a VGM Score of A.

Key Takeaways McDonald's U.S. comparable sales rose just 0.8% as value and marketing execution weighed on traffic.McDonald's is boosting digital offers, simplifying operations and expanding beverages to revive U.S. traffic.MCD trades below the industry P/E average, while international growth and its strategy support recovery. McDonald’s Corporation’s (MCD - Free Report) shares have declined 18.9% in the past six months, underperforming the industry’s 10.1% decline and the S&P 500’s 11.7% gain. The decline reflects concerns about weak U.S. traffic, inconsistent execution of value offerings and marketing missteps. The company acknowledged that U.S. comparable sales slowed sharply in the second quarter, rising just 0.8%, below its expectations.

The pressure continued into the early part of the third quarter. Management said U.S. comparable sales were slightly negative in July, indicating that the company’s corrective measures will take time to produce results. Against this backdrop, investors may wonder whether the stock’s decline has created an attractive entry point or whether more weakness could lie ahead.

On the other hand, MCD has also underperformed compared with industry peers such as Starbucks Corporation (SBUX - Free Report) and Yum! Brands, Inc. (YUM - Free Report) , as shown in the chart below.

Price Performance
Image Source: Zacks Investment Research

U.S. Execution Remains a Key ConcernMcDonald’s biggest near-term challenge is getting its U.S. business back on track. Management said the company’s value proposition has improved considerably, with base menu prices now below those of nearby competitors and the $5 Meal Deal and Extra Value Meals performing well. However, execution of the new Every Day Affordable Price menu was inconsistent.

Only about 60% to 65% of the U.S. system was executing the recommended pricing architecture for the under-$3 menu. The company also reduced the number of digital offers and removed its Buy One, Add One for $1 promotion, which hurt visits from loyal customers. Management estimated that these value-related decisions accounted for roughly two-thirds of the U.S. customer traffic shortfall compared with expectations in the quarter.

Restaurant operations also suffered because employees had to manage too many simultaneous product launches, promotions and marketing campaigns. This increased complexity, hurt service times and weighed on customer satisfaction. McDonald’s plans to simplify restaurant operations and reduce noncustomer-facing activities to allow employees to focus more on service.

McDonald’s Has Several Levers for RecoveryDespite the U.S. weakness, the latest results were not uniformly negative. Global comparable sales increased 1.3% in the second quarter, while systemwide sales rose 4% on a constant-currency basis. International markets continued to perform better, with comparable sales increasing 1.5% in International Operated Markets and 1.9% in International Developmental Licensed Markets.

The company is already taking steps to revive U.S. traffic. It plans to increase national digital flash offers, personalize promotions for frequent customers and redirect marketing spending toward proven-value offerings. Management also expects restaurant execution to improve relatively quickly because many of the operational changes are within its control. Marketing improvements are expected to take longer, with management targeting stronger execution in 2027.

Another encouraging area is beverages. McDonald’s new beverage platform is performing ahead of initial expectations in the United States, Canada and Germany. Management said more than half of beverage traffic is occurring after lunch, suggesting the platform is creating incremental occasions. Beverage orders are also benefiting from strong food attachment and higher average checks.

Long-Term Growth Strategy Offers UpsideMcDonald’s is also preparing to roll out its McDonald’s > NEXT strategy, focused on improving food taste and quality, strengthening hospitality and simplifying restaurant operations. The company expects productivity opportunities to help fund the investments associated with the strategy. More details are expected at its Investor Day in September.

The company continues to expand the restaurant base, although it pushed the target of reaching 50,000 restaurants globally to 2028 from 2027 because of inflationary development costs and a pressured consumer environment. It remains on track to open about 2,600 gross restaurants in 2026.

Financially, McDonald’s remains resilient. Second-quarter adjusted EPS was $3.38, representing a 5% increase year over year on a constant-currency basis. The company generated more than $4 billion in restaurant margins during the quarter, while its year-to-date adjusted operating margin stood at 46.9%.

McDonald's Growth ProjectionAnalysts have slightly raised their 2026 earnings expectations for McDonald’s over the past 30 days, with the Zacks Consensus Estimate increasing 2 cents to $12.88 per share. In contrast, the 2027 estimate has been lowered 10 cents to $13.93 per share. Despite these revisions, the consensus estimates point to earnings growth, with 2026 and 2027 EPS expected to increase 5.7% and 8.1% year over year, respectively.

Image Source: Zacks Investment Research

Revenue growth is also expected to remain steady. The Zacks Consensus Estimate projects revenues of $28.18 billion for 2026 and $29.61 billion for 2027, representing year-over-year growth of 4.8% and 5.1%, respectively.

MCD Stock Trades at a DiscountMcDonald’s currently trades at a discount to its industry based on the forward 12-month price-to-earnings (P/E) ratio. The stock’s multiple stands at 19.71X, below the industry average of 21.65X. By comparison, Starbucks and Yum! Brands trade at higher forward P/E multiples of 34.61X and 21.14X, respectively.

P/E (F12M)
Image Source: Zacks Investment Research

Wrapping UpOverall, McDonald’s remains a fundamentally strong business, but its near-term outlook is clouded by weak U.S. traffic, execution issues, softer marketing performance and a challenging consumer environment. Existing investors may prefer to hold as management is actively addressing these issues, while the company’s strong brand, resilient margins, international performance, beverage growth and long-term strategy provide a solid foundation for recovery.

However, the recent weakness in U.S. comparable sales and continued pressure early in the current quarter suggest that the turnaround is still in its early stages. Therefore, new investors may want to wait for clearer signs of sustained improvement in U.S. traffic and execution before initiating a fresh position, even though the stock’s relatively attractive valuation could limit downside once the business begins to regain momentum.

MCD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Low-income diners are spending less at McDonald's, Numerator found. Mario Tama/Getty Images McDonald's is losing ground to rivals among low-income fast-food diners, according to recent data.

Spending by low-income guests at the Golden Arches declined 2.4% year-over-year during the company's latest quarter, said consumer analytics company Numerator. The firm defines "low-income guests" as those from households making $40,000 or less a year.

The drop is McDonald's first quarterly decline with low-income guests in the past year and amounts to roughly $310 million in lost sales, Numerator said on Tuesday.

Rival fast-food chain Burger King, meanwhile, notched a 0.3% gain over the same period.

The data is the latest sign that McDonald's is struggling to attract diners, especially in a K-shaped economy.

While the chain long won over price-conscious diners with deals like its buy-one-get-one discount on sandwiches such as the Big Mac, it has had issues rolling out its latest value menu, which focuses on items priced $3 or less, CEO Chris Kempczinski said on an earnings call earlier this month.

"Although we've restored our overall value and affordability leadership, our restaurant-level results show that execution was inconsistent across the system," Kempczinski said.

McDonald's comparable US sales growth slowed to 0.8% during its second quarter, the company said. Rivals from Burger King to casual dining chain Chili's have posted stronger results while offering their own value menus and deals, Business Insider has reported.

Some McDonald's customers have told Business Insider they're now eating more at other chains or cooking more at home, due to higher costs.

Despite the company's struggles, some McDonald's offers are still drawing in diners of all income levels, Numerator found.

The chain's fried apple pie, an old menu item it brought back for America's 250th birthday this summer, has been purchased by 11.7% of US households, Numerator said.

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Alex Bitter You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.

Alex Bitter is a senior retail reporter covering the gig economy, food, and retail. His work focuses major gig delivery and ride-hailing apps, including Uber, Lyft, DoorDash, Instacart, and Walmart's Spark. He is interested in everything from what it's like to work on the apps to the companies' business strategies.Some of his recent stories feature gig workers who have been deactivated on the apps, DoorDash hiring traditional employees to make deliveries, gig workers' use of bots, and gig work expanding into new professions, such as nursing.Alex has also written about Aldi's US expansion, Starbucks' turnaround efforts, and the fallout from Kraft-Heinz's budget cutting. Convenience store chain Sheetz ended its "smile policy" after his reporting.Before joining Insider in September 2020, he wrote about consumer and retail companies for S&P Global Market Intelligence. He's a graduate of the University of Hawai'i at Mānoa and grew up on the Big Island.Alex lives in the Washington, DC, area, where you can find him studying ancient coins or searching for Civil War artifacts with his metal detector in his free time.Got a tip? Reach out at [email protected] or via encrypted messaging app Signal at +1 (808) 854-4501.

Fast Food Restaurants Burger King More Income Inequality

Associated Banc Corp lifted its position in McDonald’s Corporation (NYSE:MCD – Free Report) by 5.2% during the 2nd quarter, according to its most recent filing with the Securities and Exchange Commission. The firm owned 101,071 shares of the fast-food giant’s stock after buying an additional 5,022 shares during the quarter. Associated Banc Corp’s holdings in McDonald’s were worth $27,321,000 at the end of the most recent reporting period.

Several other hedge funds have also recently bought and sold shares of the company. Hamilton Point Investment Advisors LLC grew its position in McDonald’s by 1.8% in the 4th quarter. Hamilton Point Investment Advisors LLC now owns 1,750 shares of the fast-food giant’s stock valued at $535,000 after acquiring an additional 31 shares in the last quarter. Encompass More Asset Management increased its stake in McDonald’s by 1.5% during the 4th quarter. Encompass More Asset Management now owns 2,120 shares of the fast-food giant’s stock worth $648,000 after buying an additional 32 shares during the period. Richmond Investment Services LLC lifted its holdings in McDonald’s by 1.4% during the 4th quarter. Richmond Investment Services LLC now owns 2,278 shares of the fast-food giant’s stock worth $696,000 after buying an additional 32 shares in the last quarter. Papamarkou Wellner Asset Management inc. lifted its holdings in McDonald’s by 0.4% during the 4th quarter. Papamarkou Wellner Asset Management inc. now owns 8,809 shares of the fast-food giant’s stock worth $2,692,000 after buying an additional 32 shares in the last quarter. Finally, Physician Wealth Advisors Inc. boosted its position in McDonald’s by 1.6% in the 4th quarter. Physician Wealth Advisors Inc. now owns 2,102 shares of the fast-food giant’s stock valued at $642,000 after buying an additional 33 shares during the period. Institutional investors and hedge funds own 70.29% of the company’s stock.

Analyst Upgrades and Downgrades Several equities analysts have commented on MCD shares. Cfra upgraded shares of McDonald’s to a “buy” rating in a research note on Friday, May 8th. Royal Bank Of Canada reduced their price objective on McDonald’s from $305.00 to $295.00 and set a “sector perform” rating on the stock in a research note on Wednesday, August 5th. Piper Sandler set a $286.00 target price on McDonald’s in a report on Tuesday, August 4th. JPMorgan Chase & Co. lowered their target price on McDonald’s from $325.00 to $305.00 and set an “overweight” rating for the company in a research note on Monday, May 11th. Finally, Evercore set a $320.00 price target on McDonald’s in a report on Thursday, July 23rd. One investment analyst has rated the stock with a Strong Buy rating, fifteen have given a Buy rating and twelve have assigned a Hold rating to the stock. According to MarketBeat, McDonald’s currently has a consensus rating of “Moderate Buy” and an average target price of $325.44.

View Our Latest Analysis on MCD Insider Transactions at McDonald’s In other news, insider Joseph M. Erlinger sold 5,252 shares of the firm’s stock in a transaction dated Wednesday, June 10th. The stock was sold at an average price of $284.32, for a total transaction of $1,493,248.64. Following the sale, the insider owned 7,734 shares of the company’s stock, valued at approximately $2,198,930.88. This trade represents a 40.44% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, EVP Desiree Ralls-Morrison sold 2,763 shares of the firm’s stock in a transaction dated Thursday, May 28th. The stock was sold at an average price of $278.36, for a total value of $769,108.68. Following the sale, the executive vice president directly owned 6,268 shares in the company, valued at $1,744,760.48. This trade represents a 30.59% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 8,348 shares of company stock valued at $2,355,634 over the last ninety days. 0.26% of the stock is owned by company insiders.

McDonald’s Trading Down 2.7% Shares of NYSE:MCD opened at $265.43 on Tuesday. McDonald’s Corporation has a 52 week low of $260.96 and a 52 week high of $341.75. The company’s 50 day moving average is $273.56 and its two-hundred day moving average is $294.81. The company has a market cap of $187.83 billion, a PE ratio of 21.56, a P/E/G ratio of 3.05 and a beta of 0.41.

McDonald’s (NYSE:MCD – Get Free Report) last released its quarterly earnings data on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.32 by $0.06. The business had revenue of $7.10 billion during the quarter, compared to analysts’ expectations of $7.13 billion. McDonald’s had a net margin of 31.72% and a negative return on equity of 572.06%. The company’s revenue for the quarter was up 3.7% on a year-over-year basis. During the same period in the previous year, the company earned $3.19 EPS. As a group, equities research analysts expect that McDonald’s Corporation will post 12.88 EPS for the current year.

McDonald’s Announces Dividend The firm also recently declared a quarterly dividend, which will be paid on Wednesday, September 16th. Shareholders of record on Tuesday, September 1st will be issued a dividend of $1.86 per share. This represents a $7.44 dividend on an annualized basis and a yield of 2.8%. The ex-dividend date of this dividend is Tuesday, September 1st. McDonald’s’s payout ratio is 60.44%.

Key McDonald’s News Here are the key news stories impacting McDonald’s this week:

Positive Sentiment: McDonald’s is taking direct aim at Starbucks with a menu strategy focused on afternoon traffic. Expanded beverage and snack offerings could help the company capture additional dayparts and improve sales momentum. McDonald’s Takes Direct Aim at Starbucks Positive Sentiment: New limited-time fall drinks and other menu items, along with the Hello Kitty and Godzilla Happy Meal promotion, could support customer visits and boost seasonal sales. McDonald’s Has 4 New Limited-Time Menu Items Positive Sentiment: An app that helps restaurants fill open shifts has reportedly reduced the cost of missed shifts at one McDonald’s location. If scalable, better staffing could improve service consistency, labor efficiency, and restaurant-level profitability. Missed shifts were costly to this McDonald’s Positive Sentiment: A bullish analyst cited a consensus price target substantially above the current trading level, arguing that MCD could offer significant upside after its recent decline. This is supportive sentiment, though targets remain estimates rather than catalysts. McDonald’s Keeps Cratering Neutral Sentiment: Xbox-related in-game rewards and other international or promotional menu stories increase brand engagement but are unlikely to materially change near-term earnings expectations. Xbox 25th Anniversary McDonald’s Rewards Neutral Sentiment: One valuation review described MCD as roughly fairly valued on a discounted-cash-flow basis, while market multiples suggested modest undervaluation. The assessment offers some downside support but acknowledges weaker recent U.S. sales growth. McDonald’s Stock Looks Fairly Valued Negative Sentiment: Commentary on McDonald’s latest earnings characterized the results and execution as underwhelming, reinforcing concerns about soft same-store sales and the effectiveness of recent initiatives. Jim Cramer Breaks Down McDonald’s Earnings Negative Sentiment: Former Taco Bell executive Greg Creed criticized McDonald’s Red Bull beverage strategy, raising questions about product-market fit and whether the new drinks will meaningfully improve afternoon demand. Taco Bell’s Former Boss Criticizes McDonald’s Red Bull Drink McDonald’s Profile (Free Report)

McDonald’s Corporation (NYSE: MCD) is a global quick-service restaurant company best known for its hamburgers, French fries and breakfast offerings. The company develops, operates and franchises a system of restaurants that sell a range of food and beverage items, including signature products such as the Big Mac, Quarter Pounder, Chicken McNuggets, McCafé coffee beverages and a variety of salads, desserts and seasonal menu items. McDonald’s serves customers through company-operated restaurants and franchised locations, and it supports sales via dine-in, drive-thru, digital ordering platforms and third-party delivery partnerships.

Founded in 1940 by brothers Richard and Maurice McDonald as a single San Bernardino, California restaurant, the business was transformed into a franchising model after Ray Kroc joined in the mid-1950s and led the brand’s national and international expansion.

Featured Articles Five stocks we like better than McDonald’s Commodities Are Booming, But These 3 ETFs Tell Different Stories 3 Active ETFs Making Big Moves in August This ETF Is Outperforming by Avoiding the S&P 500’s Biggest Problem Birkenstock Beats the Skeptics—But Not on EPS Want to see what other hedge funds are holding MCD? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for McDonald’s Corporation (NYSE:MCD – Free Report).

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McDonald’s (NYSE:MCD | MCD Price Prediction) currently trades at $272.83, well below the Wall Street consensus price target of $316.06. That gap works out to roughly 15.85% implied upside.

The world’s largest quick-service restaurant operator runs a 46,028-unit global system through a highly franchised model that produces operating margins near 46.5% and strong free cash flow. The stock is a Dow blue chip that dividend investors treat as defensive, so a slide of this size gets Wall Street’s attention.

One outlier has gone further. Tigress Financial’s Ivan Feinseth carries a $390 target, the highest active call on the Street, implying nearly 43% upside from here.

A Sharp U.S. Execution Miss Broke the Uptrend The catalyst was a rough Q2 26 earnings report. Global comparable sales decelerated to 1.3% from 3.8% a year earlier, U.S. comparable guest counts turned negative, and comps in China and France went red. Revenue of $7.10 billion missed the $7.13 billion consensus, and while EPS of $3.38 beat by 1.77%, SG&A surged 17%.

CEO Chris Kempczinski owned the problem, telling investors, “We don’t have a strategy problem. We simply didn’t execute at the level we needed to in the second quarter.” He pinned roughly two-thirds of the U.S. traffic miss on a botched rollout of the 10 items for under $3 EDAP menu, saying “call it a third of the system that did not execute against what we were guiding around” on pricing.

Shares are off 14.54% from the February 2026 peak near $319 and sit below both the 50-day and 200-day moving averages.

Why Tigress Financial Still Sees $390 Feinseth raised his target to $390 from $385. His thesis leans on the “Accelerating the Arches” strategy: physical unit expansion paired with digital modernization, a capital-light franchise engine with gross margins near 57%, and 50 consecutive years of dividend increases underpinning the story.

The digital flywheel is the operative catalyst. Loyalty scale hit roughly 220 million 90-day active users, driving over $40 billion in trailing-twelve-month systemwide sales across 70 markets. That is the raw material for AI-driven personalization, drive-thru optimization, and higher-frequency repeat visits.

Fixes are in motion. Skye Anderson, promoted to President of McDonald’s USA, drove 30%+ comp growth across the West Zone in her prior role. The new beverage platform is running 50% above the average check in launch markets. On October 5th, management retrains 2 million+ restaurant crew on service standards.

The broader Street is more cautious. Ratings split 4 Strong Buy, 14 Buy, 15 Hold, 1 Sell, and recent updates have been reiterations rather than fresh upgrades. The 50,000-unit goal slipped from 2027 to 2028. Even the bulls need U.S. traffic to inflect.

Peers Held Up While McDonald’s Slid Starbucks (NASDAQ:SBUX) trades near $107.69 against a $112.23 average target, roughly 4.2% upside. The Back to Starbucks turnaround produced 7.9% comps last quarter.

Yum! Brands (NYSE:YUM) sits at $148.11 with a $173.38 target and about 17.1% upside. Taco Bell drove 7% Q2 comps and Pizza Hut is being divested.

Restaurant Brands International (NYSE:QSR) trades at $77.64 versus an $85.65 target, roughly 10.3% upside. Burger King’s Reclaim the Flame plan drove 8.5% U.S. comps.

The largest implied upside in the cluster sits with MCD, whether you take the 15.85% consensus or the 43% Tigress outlier. Peers are priced fairly. MCD is the dislocated name.

The Numbers Behind the Dislocation McDonald’s trades at $272.83 against a consensus target of $316.06 from 34 covering analysts, implying 15.85% upside. Tigress Financial’s $390 outlier implies roughly 43%. The stock is off 9.63% year to date and 9.55% over the trailing year, while the S&P 500 has gained 13.85% YTD.

Analyst ratings:

Strong Buy: 4 Buy: 14 Hold: 15 Sell: 1 MCD trades at a P/E of 23 with a 2.65% dividend yield and a free cash flow yield near 3.72%. Fundamentals are intact. Sentiment has done the moving.

My Take: Constructive, But Watch the U.S. Traffic Line The bull case holds if you believe Skye Anderson can restore U.S. execution within two or three quarters, the beverage platform scales as Germany suggests, and the October retraining tightens service enough to bring guest counts back. That is the path to the consensus target and, if traffic reaccelerates, toward Feinseth’s $390.

The bear case builds if you think the negative U.S. guest counts and stubborn China and France weakness are structural rather than execution-driven. Comps halving from 3.8% to 1.3% in one quarter is a red flag, and the slipped 50,000-unit target is a soft admission. If the QSR consumer is broken, loyalty scale alone will not rescue the multiple.

I lean cautiously constructive. Fundamentals justify the consensus target more than the current price, but Tigress’s $390 call requires clean U.S. execution snapback, and Q2 gave the market a real reason to doubt it.

Contact [email protected] for any questions or corrections.

Posted by Defense World Staff on Aug 15th, 2026

Ascentis Wealth Management LLC boosted its position in shares of McDonald’s Corporation (NYSE:MCD – Free Report) by 4,008.8% during the 2nd quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The fund owned 84,230 shares of the fast-food giant’s stock after purchasing an additional 82,180 shares during the period. McDonald’s comprises 1.3% of Ascentis Wealth Management LLC’s holdings, making the stock its 13th biggest holding. Ascentis Wealth Management LLC’s holdings in McDonald’s were worth $22,768,000 at the end of the most recent quarter.

Other hedge funds and other institutional investors also recently added to or reduced their stakes in the company. Your Advocates Ltd. LLP purchased a new position in McDonald’s during the 4th quarter worth $27,000. IFC & Insurance Marketing Inc. purchased a new stake in McDonald’s in the fourth quarter worth about $29,000. Abound Financial LLC bought a new position in McDonald’s during the 4th quarter worth about $30,000. DecisionPoint Financial LLC grew its holdings in McDonald’s by 1,616.7% during the 4th quarter. DecisionPoint Financial LLC now owns 103 shares of the fast-food giant’s stock worth $31,000 after acquiring an additional 97 shares in the last quarter. Finally, Entrust Financial LLC purchased a new stake in McDonald’s during the fourth quarter worth $31,000. 70.29% of the stock is owned by hedge funds and other institutional investors.

Key Headlines Impacting McDonald’s Here are the key news stories impacting McDonald’s this week:

Positive Sentiment: McDonald’s is emphasizing lower-priced meals to win back cost-conscious customers, a potentially supportive strategy as consumers increasingly prioritize value. McDonald’s is betting on cheaper meals to win back customers Positive Sentiment: New growth initiatives include Red Bull energy drinks, additional beverages and limited-time menu items. These products could increase traffic and average spending while supporting a simpler restaurant operating model. McDonald’s bringing Red Bull drinks and new sodas to US customers Positive Sentiment: The Hello Kitty x Godzilla Happy Meal promotion may generate customer interest and family traffic when it launches, although its financial impact is likely limited. McDonald’s Announces Eight Hello Kitty x Godzilla Toys Neutral Sentiment: Recent earnings showed adjusted EPS of $3.38, above expectations, while revenue of $7.10 billion was slightly below consensus. Management acknowledged inconsistent value-menu execution and excessive operational complexity, making successful implementation of the turnaround strategy critical. Five Insightful Analyst Questions From McDonald’s Q2 Earnings Call Negative Sentiment: McDonald’s is reportedly losing ground to Burger King and other low-cost alternatives, including gas-station food, as customers seek cheaper meals. Slowing second-quarter sales growth raises concerns about U.S. traffic and market share. The burger wars are heating up as McDonald’s loses ground Negative Sentiment: Erste Group lowered its fiscal 2027 EPS forecast, adding to investor concerns about earnings growth. McDonald’s FY2027 EPS Forecast Lowered Negative Sentiment: Reports that McDonald’s maintained a 515-page customer dossier could create privacy and reputational risks, though the immediate financial effect is unclear. McDonald’s customer dossier report Insider Activity at McDonald’s In other McDonald’s news, insider Joseph M. Erlinger sold 5,252 shares of the stock in a transaction on Wednesday, June 10th. The shares were sold at an average price of $284.32, for a total transaction of $1,493,248.64. Following the transaction, the insider directly owned 7,734 shares of the company’s stock, valued at $2,198,930.88. This trade represents a 40.44% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, EVP Desiree Ralls-Morrison sold 2,763 shares of the business’s stock in a transaction dated Thursday, May 28th. The stock was sold at an average price of $278.36, for a total transaction of $769,108.68. Following the sale, the executive vice president directly owned 6,268 shares of the company’s stock, valued at $1,744,760.48. This represents a 30.59% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 8,348 shares of company stock valued at $2,355,634. Corporate insiders own 0.26% of the company’s stock.

Wall Street Analyst Weigh In MCD has been the topic of a number of analyst reports. Robert W. Baird cut their price target on McDonald’s from $305.00 to $285.00 and set a “neutral” rating on the stock in a report on Wednesday, August 5th. Evercore set a $320.00 target price on McDonald’s in a research note on Thursday, July 23rd. Tigress Financial lifted their price objective on shares of McDonald’s from $385.00 to $390.00 and gave the stock a “buy” rating in a research report on Friday, July 17th. Piper Sandler set a $286.00 price objective on shares of McDonald’s in a research note on Tuesday, August 4th. Finally, BTIG Research reissued a “buy” rating and set a $350.00 target price on shares of McDonald’s in a research report on Wednesday, August 5th. One equities research analyst has rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating and twelve have issued a Hold rating to the company’s stock. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average price target of $325.44.

Check Out Our Latest Stock Report on McDonald’s

McDonald’s Trading Up 0.1% MCD opened at $272.61 on Friday. The firm has a 50 day moving average of $273.81 and a two-hundred day moving average of $295.28. The firm has a market capitalization of $192.91 billion, a PE ratio of 22.15, a P/E/G ratio of 3.05 and a beta of 0.41. McDonald’s Corporation has a 12-month low of $260.96 and a 12-month high of $341.75.

McDonald’s (NYSE:MCD – Get Free Report) last posted its earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.32 by $0.06. McDonald’s had a net margin of 31.72% and a negative return on equity of 572.06%. The company had revenue of $7.10 billion during the quarter, compared to the consensus estimate of $7.13 billion. During the same period in the previous year, the firm posted $3.19 earnings per share. The firm’s quarterly revenue was up 3.7% on a year-over-year basis. As a group, analysts predict that McDonald’s Corporation will post 12.88 EPS for the current fiscal year.

McDonald’s Announces Dividend The firm also recently announced a quarterly dividend, which will be paid on Wednesday, September 16th. Stockholders of record on Tuesday, September 1st will be paid a dividend of $1.86 per share. This represents a $7.44 annualized dividend and a dividend yield of 2.7%. The ex-dividend date of this dividend is Tuesday, September 1st. McDonald’s’s dividend payout ratio is presently 60.44%.

About McDonald’s (Free Report)

McDonald’s Corporation (NYSE: MCD) is a global quick-service restaurant company best known for its hamburgers, French fries and breakfast offerings. The company develops, operates and franchises a system of restaurants that sell a range of food and beverage items, including signature products such as the Big Mac, Quarter Pounder, Chicken McNuggets, McCafé coffee beverages and a variety of salads, desserts and seasonal menu items. McDonald’s serves customers through company-operated restaurants and franchised locations, and it supports sales via dine-in, drive-thru, digital ordering platforms and third-party delivery partnerships.

Founded in 1940 by brothers Richard and Maurice McDonald as a single San Bernardino, California restaurant, the business was transformed into a franchising model after Ray Kroc joined in the mid-1950s and led the brand’s national and international expansion.

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