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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.

McDonald's Corporation MCD faces pressure to improve U.S. sales growth as customer traffic remains weak. Menu innovation offers a potential way to attract customers, expand product categories and generate incremental demand.

It's crucial for a company to produce earnings growth. That should translate into cash flow. Companies can use that operating cash flow for capital expenditures to invest in the business's long-term growth. What's leftover is free cash flow (FCF). If companies have ample FCF, they can reward investors by paying dividends.

Of course, investors need to pick companies that have strong long-term business fundamentals and sustainable FCF. McDonald's (MCD +1.20%) and Home Depot (HD +1.85%) certainly qualify. Here's why you should them now.

Image source: Getty Images.

1. McDonald's
Many people around the world recognize McDonald's famous golden arches. Its business model and how the company makes money isn't as well known, however.

The company ended the second quarter with over 46,000 restaurants, but 95% were operated under a franchise agreement. It has a couple of different arrangements, but the key point is that the franchisee pays the operating costs and necessary capital expenditures. This asset-light business allows McDonald's to collect an up-front fee, an ongoing licensing fee (percentage of sales), and, in certain cases where it owns the property, rent.

Fortunately, sales have been growing, benefiting McDonald's. Its second-quarter same-store sales (comps) increased 1.3%. With its franchise model, higher sales, and improved profitability, McDonald's generates plenty of FCF. For the first half of the year, it had FCF of $3.7 billion. That gives it plenty of cushion to afford the $2.6 billion in dividend payments.

MCD McDonald's$245.58+$2.91 (+1.20%)

NYSE · As of 1:57 PM ET 10/20/26

Historically, the company has shown a strong commitment to raising dividends. Last month, the board of directors announced it would boost the December quarterly payout by 3.8% to $1.93. That marked 50 straight years of increases, meaning that McDonald's joined the ranks of the Dividend Kings. That's an impressive group of companies with at least 50 consecutive years of dividend hikes.

At the new $1.93 rate, the company will pay an annualized dividend of $7.72 per share. That equates to a 3.2% dividend yield. That's more than triple the S&P 500 index's 1%.

2. Home Depot
Home Depot isn't merely a home-improvement retailer. By offering attractive prices and convenience, it's the dominant company in the sector, with the highest sales. Although the company's results fluctuate with the economic cycle, they are also affected by key factors, including home sales, consumer confidence, unemployment, and inflation. These impact homeowners' ability and willingness to undertake major construction projects.

There's no denying that macroeconomic conditions have been challenging. Existing home sales fell 2.5% and 2.2% year over year in both August and September, according to data released by the National Association of Realtors.

Meanwhile, mortgage rates have spiked, with the average 30-year fixed rate at 7.4% for the week ended Oct. 15. This makes it more expensive for borrowers to purchase homes, and will likely continue to dent home-buying demand.

Large economic factors have certainly affected Home Depot's sales as homeowners have pushed off major renovations. Its sales have been tepid.  That includes Home Depot's fiscal second-quarter sales, with comps increasing only 1.7%. Still, its adjusted diluted earnings per share grew 5.1% versus a year ago to $4.92. The results were for the period that ended on Aug. 2.

HD Home Depot$315.60+$5.72 (+1.85%)

NYSE · As of 1:57 PM ET 10/20/26

Home Depot produced more than enough FCF to pay dividends. For the first half of the year, it had FCF of $9.7 billion compared to $4.6 billion in dividends.

Despite its results being influenced by economic forces outside of its control, Home Depot has built a remarkable record of dividend increases. It has raised them every year starting in 2010. Even during the challenging years of the Great Recession, Home Depot kept dividends constant from 2007 through 2009.

Home Depot's stock has a 3% dividend yield, three times that of the S&P 500 index.

McDonald's (MCD -0.12%) is set to join fewer than 60 U.S. public companies as the newest Dividend King, a designation for companies that have paid and raised their dividends for at least 50 consecutive years. The fast food giant's latest quarterly payout of $1.93 per share marks a 4% increase over its prior payout. And at $7.72 per share -- McDonald's now has a forward dividend yield of 3.2% -- which is higher than most Dividend Kings and roughly triple the yield of the S&P 500 (^GSPC +0.41%).

Investors who own the stock by Dec. 1 will be eligible to receive the $1.93 per share payout on Dec. 15. Here's why McDonald's is one of the best restaurant stocks to buy now.

Image source: The Motley Fool.

1. A franchise model executed to perfection As of Dec. 31, 2025, 96% of McDonald's global store count of 45,356 were franchised -- including a 95% franchise rate in the U.S., 89% of international operated markets (mainly in Europe), and 100% of stores in China, Japan, Brazil, the Philippines, and South Korea.

McDonald's is nothing short of a global sensation. U.S. restaurants now make up just 30.2% of systemwide revenues -- making McDonald's primarily reliant on international markets.

The company's franchise strategy, paired with its global diversification, makes it increasingly resistant to recessions, especially if they are concentrated in a particular geography. Franchisees pay McDonald's a down payment for opening a restaurant, along with licensing fees, rent, royalties, and other expenses. And in exchange, the franchisee keeps the majority of store sales, unlocks McDonald's instantly recognizable global brand, benefits from its supply chain and marketing, and connects with its app, which has become an integral way to increase customer engagement through mobile ordering and rewards.

2. McDonald's FCF yield has soared to 4.5% The franchise model generates predictable free cash flow (FCF) for McDonald's, helping it manage expenses and providing visibility into its dividend payments.

MCD data by YCharts

As you can see in the chart, McDonald's FCF yield of 4.5% is higher than its trailing dividend yield of 3.1%. Meaning that if McDonald's were to theoretically pass along all of its FCF to shareholders, it could afford a 4.5% dividend.

MCD EPS Diluted (TTM) data by YCharts

Earnings and FCF are at all-time highs, but its stock price has fallen dramatically -- down 20.5% year-to-date and 28.9% from its all-time high of $341.75 (achieved on March 2).

$242.67-$0.30 (-0.12%)

NYSE · As of 4:00 PM ET 10/19/26

The sell-off has pushed McDonald's dividend yield to multi-year highs and compressed its valuation. McDonald's now has a price-to-earnings (P/E) ratio of just 19.7 and a forward P/E of 18.9. That's dirt cheap for a stock that has traditionally commanded a premium over the S&P 500 -- as its 10-year median P/E is 25.8.

3. McDonald's is investing $8.5 billion in long-term growth McDonald's is a cash cow with a high yield and an inexpensive valuation. But there are valid reasons the stock is selling off.

The biggest factor is weak same-store sales. In McDonald's second quarter 2026, same-store sales in the U.S. were up just 0.8%, and global same-store sales increased 1.3%. Global systemwide sales were up 5%, but that's mainly from new store openings. This has been a common theme in the quick-service restaurant industry, where many companies are relying heavily on new store openings to drive growth. Same-store-sales growth is the crown jewel for restaurants and retail because it indicates pricing power and strong demand for products and services.

Inflationary pressures are affecting consumer spending. An emphasis on health and wellness is another factor that fast-food restaurants, chip and snack brands, soda companies, and packaged-goods companies are contending with.

Despite these headwinds, McDonald's remains confident in its long-term growth plan. On Sept. 23, it released an $8.5 billion, 10-year roadmap to invest in its franchises and drive consumer demand. The costs are front-loaded, with $5 billion in expected added costs through 2030, which could impact margins and FCF. But again, McDonald's high margins, thanks to its franchise model, allow it to afford this mammoth investment when some of its peers are treading water.

The 10-year strategy centers around investing in the McDonald's menu, its customers, restaurants, and people. McDonald's expects roughly $100,000 in annual cash flow benefits for the average U.S. restaurant. In addition to efficiency improvements, McDonald's expects to take market share in the chicken and beverage categories while maintaining its leadership in beef.

A high conviction value stock to buy now One of my favorite investment setups is when a top company in an industrywide downturn decides to invest in long-term growth rather than over-altering its strategy just to boost its near-term numbers. McDonald's can't control inflation or consumer spending, so it's putting the pieces in place to boost efficiency and market share over the long term.

Throw in an ultra-reliable dividend and an inexpensive valuation, and it's easy to see why McDonald's stands out as one of the best high-yield value stocks for long-term investors to buy now.

The share price of McDonald's has seen an uncharacteristically significant drop over the last several months. Much of the analysis that's out there on McDonald's seems to miss (or, at least, insufficiently prioritize) the key driving factor for MCD's share price. Analysis of this factor suggests MCD, at current price levels, offers investors attractive value.

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McDonald’s Corporation (NYSE:MCD – Get Free Report) saw unusually large options trading on Thursday. Stock investors purchased 42,937 call options on the company. This represents an increase of approximately 24% compared to the average volume of 34,725 call options.

McDonald’s Price Performance NYSE:MCD opened at $242.67 on Friday. The business has a 50 day moving average of $252.68 and a 200 day moving average of $272.30. The company has a market capitalization of $171.72 billion, a price-to-earnings ratio of 18.99, a PEG ratio of 2.67 and a beta of 0.44. McDonald’s has a 1-year low of $229.20 and a 1-year high of $341.75.

McDonald’s (NYSE:MCD – Get Free Report) last issued its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 EPS for the quarter, beating analysts’ consensus estimates of $3.32 by $0.06. The business had revenue of $7.10 billion for 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 business’s quarterly revenue was up 3.7% on a year-over-year basis. During the same period last year, the business earned $3.19 earnings per share. As a group, sell-side analysts anticipate that McDonald’s will post 12.84 EPS for the current year.

McDonald’s Increases Dividend The firm also recently announced a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Tuesday, December 1st will be issued a dividend of $1.93 per share. The ex-dividend date of this dividend is Tuesday, December 1st. This represents a $7.72 annualized dividend and a dividend yield of 3.2%. This is an increase from McDonald’s’s previous quarterly dividend of $1.86. McDonald’s’s payout ratio is 60.44%. Analysts Set New Price Targets MCD has been the subject of several research analyst reports. Royal Bank Of Canada dropped their price objective on McDonald’s from $290.00 to $285.00 and set a “sector perform” rating for the company in a research note on Thursday, September 24th. KeyCorp decreased their target price on McDonald’s from $305.00 to $280.00 and set an “overweight” rating on the stock in a research note on Tuesday, October 6th. Needham & Company LLC restated a “buy” rating on shares of McDonald’s in a research note on Monday, September 21st. Robert W. Baird lowered their price target on McDonald’s from $285.00 to $250.00 and set a “neutral” rating on the stock in a report on Thursday, September 24th. Finally, Jefferies Financial Group dropped their price target on McDonald’s from $260.00 to $250.00 and set an “overweight” rating for the company in a research report on Tuesday, September 29th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, thirteen have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $295.94.

Read Our Latest Stock Analysis on McDonald’s

Trending Headlines about McDonald’s Here are the key news stories impacting McDonald’s this week:

Positive Sentiment: Consumer-stock rotation provided support. Investors have been shifting money out of technology stocks and into beaten-down consumer names, giving McDonald’s and other restaurant stocks a lift. These Consumer Stocks Are Getting a Lift as Investors Rotate Out of Tech Positive Sentiment: Options trading indicates near-term bullish positioning. Traders purchased 42,937 MCD call options, about 24% above typical daily call volume. This can signal expectations for a rebound, although it does not guarantee sustained buying. Positive Sentiment: Limited-time promotions may help traffic. McDonald’s is bringing back a popular meal and its Halloween Boo Buckets, featuring a Disney-villain theme. These promotions could support customer engagement and sales during the quarter. McDonald’s is bringing back an iconic meal for a limited time Positive Sentiment: Dividend status remains a long-term attraction. McDonald’s has become a Dividend King, supported by its franchised business model, royalty income and pricing power. Nevertheless, future dividend growth depends on earnings recovery. McDonald’s Dividend King Status Is Impressive, but Valuation Still Matters Institutional Trading of McDonald’s Hedge funds have recently added to or reduced their stakes in the business. State Street Corp boosted its stake in shares of McDonald’s by 1.8% during the second quarter. State Street Corp now owns 36,080,505 shares of the fast-food giant’s stock valued at $9,752,921,000 after purchasing an additional 646,675 shares during the period. Bank of New York Mellon Corp bought a new position in shares of McDonald’s in the second quarter worth approximately $1,359,276,000. Arrowstreet Capital Limited Partnership grew its holdings in shares of McDonald’s by 17.2% in the first quarter. Arrowstreet Capital Limited Partnership now owns 3,637,785 shares of the fast-food giant’s stock worth $1,130,587,000 after purchasing an additional 533,448 shares during the last quarter. Diamant Asset Management Inc. increased its stake in shares of McDonald’s by 30,979.0% in the first quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant’s stock worth $806,917,000 after buying an additional 2,587,986 shares during the period. Finally, J. Stern & Co. LLP increased its stake in shares of McDonald’s by 9,867.5% in the fourth quarter. J. Stern & Co. LLP now owns 2,541,008 shares of the fast-food giant’s stock worth $776,608,000 after buying an additional 2,515,515 shares during the period. 70.29% of the stock is owned by institutional investors.

McDonald’s Company Profile (Get Free Report)

McDonald’s Corporation is a global quick-service restaurant company that operates and franchises restaurants under the McDonald’s brand. Its restaurants serve a menu that includes hamburgers, cheeseburgers, chicken sandwiches, French fries, breakfast items, desserts, salads, beverages and coffee. Offerings vary by market, and many locations provide drive-thru service, delivery and digital ordering through the McDonald’s mobile app.

The company operates through a heavily franchised business model, with restaurants owned and operated by independent franchisees, affiliates and the company itself.

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First Citizens Bank & Trust Co. grew its position in shares of McDonald’s Corporation (NYSE:MCD – Free Report) by 42.3% during the third quarter, according to its most recent filing with the SEC. The firm owned 19,067 shares of the fast-food giant’s stock after acquiring an additional 5,667 shares during the period. First Citizens Bank & Trust Co.’s holdings in McDonald’s were worth $4,403,000 at the end of the most recent quarter.

A number of other large investors also recently bought and sold shares of MCD. State Street Corp grew its position in McDonald’s by 1.8% during the 2nd quarter. State Street Corp now owns 36,080,505 shares of the fast-food giant’s stock valued at $9,752,921,000 after purchasing an additional 646,675 shares during the last quarter. Bank of New York Mellon Corp bought a new stake in shares of McDonald’s in the second quarter worth $1,359,276,000. Arrowstreet Capital Limited Partnership increased its position in shares of McDonald’s by 17.2% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 3,637,785 shares of the fast-food giant’s stock valued at $1,130,587,000 after purchasing an additional 533,448 shares during the last quarter. Diamant Asset Management Inc. increased its holdings in McDonald’s by 30,979.0% during the first quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant’s stock valued at $806,917,000 after buying an additional 2,587,986 shares during the last quarter. Finally, J. Stern & Co. LLP raised its holdings in McDonald’s by 9,867.5% in the 4th quarter. J. Stern & Co. LLP now owns 2,541,008 shares of the fast-food giant’s stock worth $776,608,000 after purchasing an additional 2,515,515 shares during the period. 70.29% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets A number of equities research analysts recently issued reports on MCD shares. Seaport Research Partners initiated coverage on shares of McDonald’s in a research note on Wednesday, September 16th. They set a “neutral” rating on the stock. Tigress Financial upped their price objective on McDonald’s from $385.00 to $390.00 and gave the company a “buy” rating in a research report on Friday, July 17th. HC Wainwright set a $250.00 target price on shares of McDonald’s in a research note on Friday, September 25th. Oppenheimer cut their price target on McDonald’s from $325.00 to $295.00 and set an “outperform” rating on the stock in a research note on Thursday, September 24th. Finally, JPMorgan Chase & Co. dropped their target price on McDonald’s from $280.00 to $260.00 and set an “overweight” rating on the stock in a research report on Thursday, September 24th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have given a Buy rating, thirteen have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus target price of $295.94.

Read Our Latest Research Report on MCD Trending Headlines about McDonald’s Here are the key news stories impacting McDonald’s this week:

Positive Sentiment: Turnaround spending could support long-term sales. McDonald’s has outlined an approximately $8.5 billion franchisee-support and restaurant-modernization plan through 2036. The company is also pursuing more personalized digital offers, value meals and streamlined marketing to improve customer engagement after recent promotions underperformed. McDonald’s Trades at 18 Times Earnings McDonald’s Marketing Reset Positive Sentiment: Technology investments may improve operations. Reports describe plans involving AI-powered drive-thru technology, including a system called Archy, as part of the broader restaurant overhaul. Successful deployment could improve speed, labor efficiency and order accuracy, although a previous AI test was discontinued. McDonald’s AI Drive-Thru Overhaul Positive Sentiment: Analyst valuation remains above the current share price. A reported consensus target price of $295.94 indicates meaningful potential upside if McDonald’s executes its recovery strategy. McDonald’s Consensus Target Price Neutral Sentiment: The latest session’s increase contrasted with a difficult medium-term trend. MCD closed at $238.31 after gaining in the session, but shares have fallen roughly 23% over six months. At about 19 times earnings, investors are weighing a potentially attractive entry valuation against uncertain earnings growth. McDonald’s Increases Despite Market Slip Neutral Sentiment: Brand and promotional initiatives continue. McDonald’s is extending grassroots football sponsorships and may bring back Halloween Boo Buckets featuring Disney villains. These efforts could support traffic and brand engagement, but their financial effect is likely limited. McDonald’s Grassroots Football Commitment Negative Sentiment: Weak U.S. sales and value-menu execution remain key concerns. Coverage points to softer domestic demand and lower earnings estimates, raising doubts about whether the turnaround investments can produce sufficient returns. Erste Group also modestly reduced its FY2026 and FY2027 EPS forecasts. McDonald’s Stock Down 23 Percent Negative Sentiment: Legal and reputational risks add uncertainty. McDonald’s faces a reported class-action lawsuit alleging issues with AI-based menu pricing, while poor customer ratings at individual restaurants could weigh on perceptions of service quality. McDonald’s AI Menu Pricing Lawsuit McDonald’s Price Performance NYSE:MCD opened at $238.16 on Thursday. The company’s fifty day moving average price is $253.35 and its 200-day moving average price is $272.74. The firm has a market capitalization of $168.53 billion, a P/E ratio of 18.79, a PEG ratio of 2.64 and a beta of 0.44. McDonald’s Corporation has a 1-year low of $229.20 and a 1-year high of $341.75.

McDonald’s (NYSE:MCD – Get Free Report) last released its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 EPS for the quarter, beating the consensus estimate of $3.32 by $0.06. The company had revenue of $7.10 billion for the quarter, compared to analyst estimates of $7.13 billion. McDonald’s had a net margin of 31.72% and a negative return on equity of 572.06%. The firm’s revenue was up 3.7% on a year-over-year basis. During the same quarter last year, the business earned $3.19 earnings per share. Equities analysts anticipate that McDonald’s Corporation will post 12.84 EPS for the current fiscal year.

McDonald’s Increases Dividend The business also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Tuesday, December 1st will be issued a $1.93 dividend. This is a boost from McDonald’s’s previous quarterly dividend of $1.86. This represents a $7.72 annualized dividend and a dividend yield of 3.2%. The ex-dividend date of this dividend is Tuesday, December 1st. McDonald’s’s payout ratio is 60.44%.

About McDonald’s (Free Report)

McDonald’s Corporation is a global quick-service restaurant company that operates and franchises restaurants under the McDonald’s brand. Its restaurants serve a menu that includes hamburgers, cheeseburgers, chicken sandwiches, French fries, breakfast items, desserts, salads, beverages and coffee. Offerings vary by market, and many locations provide drive-thru service, delivery and digital ordering through the McDonald’s mobile app.

The company operates through a heavily franchised business model, with restaurants owned and operated by independent franchisees, affiliates and the company itself.

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Key Takeaways MCD's shares fell 22.9% in six months as U.S. sales weakness and operational challenges hurt performance.McDonald's value menu missed expectations as poor execution and weaker marketing hurt traffic.MCD trades at 17.45X forward earnings, but earnings estimate cuts and weak U.S. sales warrant caution. McDonald's Corporation’s (MCD - Free Report) shares have declined 22.9% over the past six months, underperforming the restaurant industry, which fell 16.7%, and the S&P 500, which gained 10.8%. The sell-off reflects concerns about slowing U.S. sales momentum, inconsistent execution of value offerings, weaker-than-expected marketing results and a challenging consumer environment.

McDonald's stock has faced several headwinds over the past six months. First, the U.S. business has struggled to generate stronger comparable sales growth amid a challenging consumer environment. Second, the company's value-menu strategy did not deliver the expected increase in customer traffic. Third, operational inefficiencies and underwhelming marketing campaigns weakened customer engagement. Concerns about development costs and a slower restaurant expansion timeline have added to the challenges.

These issues were evident in the second quarter of 2026, when global comparable sales increased just 1.3%, while U.S. comparable sales grew 0.8%. Management acknowledged that execution in the United States fell short of expectations.

In the same time frame, McDonald’s has underperformed restaurant peers including Starbucks Corporation (SBUX - Free Report) , Yum! Brands, Inc. (YUM - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) .

Price Performance
Image Source: Zacks Investment Research

Value Strategy and Customer Traffic Remain Key ConcernsMcDonald's introduced its Every Day Affordable Price menu in April 2026, offering 10 items priced below $3. However, the initiative failed to generate the expected incremental sales because of inconsistent execution and limited consumer awareness. Only about 60-65% of the U.S. restaurant system followed the recommended pricing structure.

The company also reduced digital offers and discontinued its Buy One, Add One for $1 promotion to offset the cost of its value initiatives. These changes disappointed some frequent customers. Management attributed roughly two-thirds of the U.S. customer traffic shortfall against its expectations to these value-related execution issues.

Marketing performance added to the pressure. McDonald's U.S. business faced a difficult comparison with the previous year's successful Minecraft campaign, while its FIFA campaign in June generated less business than expected. These shortcomings suggest that the company needs to improve its promotional strategy to bring customers back more consistently.

Operational Challenges and Consumer PressuresRestaurant execution also deteriorated during the quarter. Management said restaurant teams were overwhelmed by too many simultaneous initiatives, increasing service times and reducing customer satisfaction. This is a concern because slower service and inconsistent experiences can weaken repeat visits, particularly when consumers are sensitive to prices.

The broader quick-service restaurant industry has also experienced flat-to-negative traffic in several major markets. Meanwhile, McDonald's acknowledged a challenging consumer backdrop in China, which affected its international development-licensed markets.

Expansion plans face additional hurdles. The company pushed back its target of reaching 50,000 restaurants worldwide from the end of 2027 to 2028, citing consumer pressures and cumulative inflation in development costs. Although McDonald's still expects to open approximately 2,600 gross restaurants in 2026, higher development costs could constrain the pace of expansion.

Can MCD Stock Recover?McDonald's is taking steps to address its weaknesses. Management plans to restore national digital promotions, personalize offers for loyal customers, increase marketing support for proven value meals and simplify restaurant operations. Its McDonald's NEXT strategy also emphasizes food quality, customer hospitality and productivity improvements.

There are encouraging signs beneath the operational challenges. In the second quarter, global systemwide sales increased 4% in constant currency and adjusted earnings per share rose 5% on the same basis to $3.38. The company also had nearly 220 million active loyalty users globally, demonstrating the potential of its digital platform.

However, the recovery may take time. Management indicated that operational improvements could emerge sooner, while meaningful marketing adjustments would take longer. U.S. comparable sales were slightly negative in July, indicating that the weakness continued into the third quarter's opening month.

McDonald's Earnings Growth OutlookAnalysts have trimmed their earnings estimates for McDonald's over the past 30 days. The Zacks Consensus Estimate for 2026 earnings has declined 4 cents to $12.84 per share, while the 2027 estimate has declined 22 cents to $13.69. Despite these downward revisions, earnings are projected to grow 5.3% in 2026 and 6.6% in 2027 year over year.

Image Source: Zacks Investment Research

Revenue growth is expected to remain positive, although the pace may moderate. The Zacks Consensus Estimate projects revenues of $28.17 billion for 2026 and $28.94 billion for 2027, reflecting year-over-year growth of 4.8% and 2.8%, respectively.

MCD Stock Trades at a DiscountMcDonald's shares appear relatively inexpensive compared with the restaurant industry based on the forward 12-month price-to-earnings (P/E) ratio. MCD currently trades at 17.45X forward earnings, below the industry average of 19.9X. In comparison, Starbucks and Yum! Brands command higher forward P/E multiples of 28.94X and 21.45X, respectively.

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

Is MCD a Buy Now?McDonald's valuation discount may attract investors seeking long-term opportunities, but persistent operational challenges and downward earnings estimate revisions warrant caution. The company's strong brand, extensive loyalty network and renewed focus on value could support a recovery. However, sustained improvement in U.S. customer traffic and restaurant execution remains essential. With a Zacks Rank #4 (Sell), MCD's near-term outlook remains weak. Investors may prefer to wait for clearer signs of a turnaround before buying the dip.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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 Corp (NYSE:MCD) stock has fallen to four-year lows. A former hedge fund manager says the valuation of the stock looks good at current levels and calls shares "undervalued." Here’s why.

• McDonald’s stock is trading near recent lows. What’s the outlook for MCD shares?

Sizing Up McDonald’s StockFormer hedge fund manager Whitney Tilson recently took a look at McDonald’s stock and compared the current valuation and thesis to when he looked at the stock back in June.

"With the stock down another 14% since then, might it now be an especially good buying opportunity?" Tilson asks in a newsletter.

Tilson highlights several strengths of McDonald’s, including boosted margins through franchising, free cash flow doubling since 2018 and strong shareholder returns through share buybacks and a 3%+ dividend yield.

"Over the past two decades, revenues have barely moved. But that’s mostly because McDonald’s has franchised many company-owned units, which reduces capital intensity and boosts profits."

McDonald’s growth has slowed in recent quarters, which may be contributing to the declining stock price. Tilson highlights global comparable sales being up 5.7% in the fourth quarter of 2025, up 3.8% in the first quarter of 2026 and up 1.3% in the second quarter of 2026. The market expert says this is what makes McDonald’s a "slow-growing cash cow."

"McDonald’s is an excellent business, with high margins and robust FCF."

Tilson doesn’t ignore the challenge of restaurant stocks from weight-loss drugs, but sees the valuation of McDonald’s stock too cheap to ignore.

"McDonald’s trades at 17.6 times consensus analysts’ estimates for next year. That’s slightly below its historical average price-to-earnings of 19.7 times over the past quarter century."

Tilson called McDonald’s stock fairly valued back in June. He reaches a different conclusion this time.

"Today, I think it’s moderately undervalued."

Read Next

Tilson’s History with McDonald’s StockTilson previously owned McDonald’s stock in late 2002, a position that he admits he later "backed up the truck" for by adding more shares in early 2003 when they were under $13.

At one time in 2003, the stock was around 10% of Tilson’s hedge fund.

"It was the biggest win of my early investing career," Tilson said.

The investor recalls shares doubling two years after 2003.

In a five-year time period, Tilson watched McDonald’s shares go from under $13 to the mid-$60s.

He later sold the stock during the bear market in 2008, recalling that McDonald’s was one of only two stocks in the Dow Jones Industrial Average that were positive that year, with Walmart being the other.

Tilson said this ended up being a mistake.

"I should have ‘let my winners run’ – the key to long-term investment success, as I’ve written many time."

McDonald’s stock hit $200 by 2019 and $300 by 2024, before peaking at $341.75 in March 2026.

Time will tell if Tilson is right about McDonald’s stock again, but the fact that shares trade at four-year lows does offer an interesting entry point for investors.

Read Next

Image via Shutterstock

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

McDonald's (MCD) has declined ~30% from its February peak, now offering a 3.3% dividend yield and trading at a significant discount to historical EV/EBIT multiples. MCD's recent underperformance stems from inconsistent value proposition execution and decentralized franchisee pricing, especially impacting low-income customer traffic. The rent-and-royalty moat is intact, while the NEXT plan trades near-term earnings for franchisee financial health with unit growth moderating to maintain returns.

By and Roya Shahidi You're currently following this author! Click to unsubscribe from email alerts.

After sparking disappointment from fans in the UK, we compared both versions of McDonald's snack wraps in the US and UK. Roya Shahidi/Business Insider & Erin McDowell/Business Insider The Snack Wrap has officially landed overseas.

McDonald's brought the fan-favorite item back to UK menus on October 6, marking its first appearance there since it was discontinued in 2016. Much like in the US, British fans spent years calling for its return — and McDonald's finally answered.

However, shortly after the launch, The Sun reported that a few British McDonald's customers were disappointed by the "downgraded" menu item, lamenting the removal of cheese from the wraps and calling it "a bit plain" on social media.

We decided to put each version to the test.

Our London-based reporter, Roya Shahidi, thought the UK's version of the Snack Wrap, while light and crispy, was disappointing overall and needed cheese.

On the other hand, our US-based reporter Erin McDowell was impressed by the flavorful sauces and crispy chicken tenders included in each of her wraps.

Here's how McDonald's Snack Wraps in the US and the UK compare in terms of taste and value.

UK-based reporter Roya went to a McDonald's in Islington, London.

McDonald's in Islington, London. Roya Shahidi/Business Insider There were no ads inside the McDonald's about the Snack Wrap's return.

McDonald's in the UK has only one version of the Snack Wrap.

McDonald's Snack Wrap on the menu in London. Roya Shahidi/Business Insider Unlike in the US, where you can choose between a spicy or ranch version of the wrap, the UK only has one option.

The UK version contains 282 calories and costs £1.99, equivalent to about $2.62.

When ordering in the app, you can upgrade the Snack Wrap to a medium meal deal for £5.59 ($7.38), which includes a drink and fries.

The UK Snack Wrap was neatly packaged.

The Snack Wrap in the UK. Roya Shahidi/Business Insider Roya took the Snack Wrap to the office to eat.

The UK Snack Wrap comes with a chicken tender, black pepper mayo, and shredded lettuce.

The UK Snack Wrap comes with a chicken, black pepper mayo, and lettuce. Roya Shahidi/Business Insider Roya found it disappointing that there was no shredded cheese inside, unlike in the US, especially since the previous UK iteration did contain cheese.

At this McDonald's, adding a cheese slice would cost 50 pence — equivalent to about 66 cents.

There was a generous amount of mayo and shredded lettuce in the wrap. However, while she is a fan of the UK McDonald's Chicken Selects, Roya felt the portion was too small for the price.

The chicken breast was tender and crispy, but the wrap overall was quite bland.

The McDonald's Snack Wrap comes with a Chicken Select, the UK version of the McCrispy Chicken Strip. Roya Shahidi/Business Insider Roya thought the mayo serving was generous, though as someone who prefers other sauces, she would have liked the option for something else.

The black pepper mayo had a mild kick, and the lettuce added a nice crunch, but overall, it was missing something extra, like cheese.

The UK-based reporter thought the ingredient distribution wasn't great, with one side containing no lettuce.

One side of the UK Snack Wrap contained little lettuce. Roya Shahidi/Business Insider As its name suggests, the Snack Wrap makes a good snack because it's light; however, it's not filling enough as a meal in its own right.

Business Insider reached out to McDonald's for comment, but did not immediately hear back.

In the US, they come in two varieties — spicy and ranch.

The snack wraps came in two different flavors in the US. Erin McDowell/Business Insider This is arguably the biggest difference compared to the new UK version, along with the addition of shredded cheese.

Our US-based reporter Erin tried both wraps and was impressed by the amount of sauce in each.

The snack wraps were noticeably saucier in the US. Erin McDowell/Business Insider Both wraps are made with McDonald's new chicken tenders, which launched in the US in May 2025.

The spicy Snack Wrap packed more heat than Erin expected.

The spicy wrap packed some heat. Erin McDowell/Business Insider The lettuce tasted fresh, and Erin was impressed by how substantial the wraps were. Though billed as snack-sized, one was filling enough for a quick lunch.

The spicy sauce had a noticeable kick without being overwhelming — enough heat to earn its name.

She also enjoyed the ranch version of the Snack Wrap.

The ranch version also impressed our US-based reporter. Erin McDowell/Business Insider The ranch version tasted lighter but still packed plenty of flavor. Its creamy sauce balanced the fresh lettuce and crispy chicken tender, while the shredded cheese added a mild savory note and a little extra texture to each bite.

The tortilla wrap itself also seemed lighter and less doughy in the US.

We can see why McDonald's fans across the pond are disappointed by this new release.

The Snack Wraps were noticeably different. Roya Shahidi/Business Insider & Erin McDowell/Business Insider While both reporters were excited to try the Snack Wraps, we felt a little let down by the UK version.

The key differences between the US and UK versions of the snack wrap are the absence of cheese in the UK version and fewer flavor options, which ended up greatly affecting our final takeaways.

While Erin would — and has — order these snack wraps again after their first launch, Roya wasn't so sure, given the bland flavor profile, less-than-satisfactory presentation, and mediocre distribution of ingredients.

When it comes to Snack Wraps, McDonald's fans might have to head to the US to get the tastiest version possible.

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Erin McDowell You're currently following this author! Click to unsubscribe from email alerts.

Erin McDowell is a senior reporter on Business Insider's editorial partnerships team. She covers food, lifestyle, and entertainment for Business Insider and its partner sites, including MSN, Apple News, and Yahoo.She graduated from Elon University in January 2019, where she studied strategic communications and digital art. She has written for V Magazine, Milk.XYZ, OUT.com, Brides Magazine, and more. She lives in Brooklyn, New York.

Roya Shahidi You're currently following this author! Click to unsubscribe from email alerts.

Roya is a reporter on Business Insider's Editorial Partnerships team. She is based in London. Before joining Business Insider, she worked as a reporter at financial newswire Alliance News and was an intern at The Wall Street Journal. Roya graduated from City St George's, University of London with an MA in International Journalism. 

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TROY, Mich., Oct. 8, 2026 /PRNewswire/ -- The Editorial Advisory and Securities Review Committee of BetterInvesting Magazine Descartes Systems Group (DSGX: NASDAQ) as its "Stock to Study and McDonald's Corp. (MCD: NYSE) as its "Undervalued Stock" in the December 2026 issue for investors' informational and educational use.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of MCD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

7.31K Followers

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MCD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

McDonald's Corp (NYSE:MCD, XETRA:MDO) is facing a federal lawsuit alleging its artificial intelligence (AI) pricing tool illegally coordinates prices among franchisees and has raised menu costs for customers.

The proposed nationwide class action was filed Friday in Illinois by Michael Thomas, who alleges McDonald’s shares nonpublic store-level sales data among franchisees that can compete in the same markets. 

The complaint alleges that McDonald’s uses millions of daily transactions to generate price recommendations across thousands of restaurants, effectively facilitating algorithmic price-fixing.

McDonald’s has responded by saying that the lawsuit contains inaccuracies and that it would defend itself, arguing that franchisees independently decide menu prices and can choose whether to use its pricing tools.

The company said its system has provided pricing recommendations for more than a decade, using factors including restaurant sales, location and competitor prices to help franchisees make decisions.

About 95% of McDonald’s 14,000 US restaurants are operated by franchisees, making the relationship between the company’s recommendations and individual pricing decisions central to the case. 

The lawsuit alleges McDonald’s has significant leverage over franchisees and can pressure them to follow pricing recommendations, despite its position that the tools do not automate, coordinate or fix prices.

The case comes as McDonald’s faces pressure to make its restaurants more affordable for lower-income customers after years of price increases and weaker visits from budget-conscious consumers.

McDonald’s has acknowledged that US menu prices increased 40% between 2019 and 2024.

Its chief executive, Chris Kempczinski, said in August that only 60% of US restaurants had adopted the company’s proposed 10-item menu priced below $3. 

Thomas is seeking class-action status, damages for affected consumers and an order preventing McDonald’s from enforcing agreements that allegedly restrict competition.

Market indicators are flashing red heading into October, and investors who wait too long to reposition may regret it. Five elite dividend stocks in healthcare, consumer staples, and utilities have weathered every major crash for decades, and they are still…

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Market indicators are starting to flash red, and now that we are in October, Wall Street and the financial media are increasingly talking about a potential big sell-off. Protecting your portfolio in a market crash means shifting into defensive leadership stocks that treat equity distribution as a mandate, not a shareholder luxury. We looked for stocks with rock-solid balance sheets in sectors that have held up well during past market downturns, and we found five companies in healthcare, consumer staples, and regulated utilities built to survive even the worst economic times and stock market sell-offs.

The companies we highlight have strong cash flow that supports their long history of dividend payouts, and moving capital to them now offers investors a low-beta passive-income safety net that still provides growth and total-return potential while effectively protecting principal.

All the stocks are either Dividend Aristocrats, S&P 500 members that have raised dividends for at least 25 years, or members of the elite Dividend Kings, which have increased dividends for 50 years or longer. All offer solid entry points, and top Wall Street firms we cover rate them a Buy.

Why Do We Cover Crash-Proof Dividend Stocks?

Since 1926, dividends have accounted for approximately 32% of the S&P 500’s total return, while capital appreciation has accounted for 68%. Therefore, sustainable dividend income and the potential for capital appreciation are essential to total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the 50 years from 1973 to 2023. Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

Coca-Cola This American multinational corporation founded in 1892 remains one of Warren Buffett’s longest-held holdings. His 400 million Coca-Cola (NYSE: KO | KO Price Prediction) shares represent 9.3% of the float and 9.3% of the portfolio. The stock offers a dependable 2.42% dividend, raised to $0.53 per share in May 2026, marking the 64th straight year of dividend increases.

Coca-Cola is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands. Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands, including:

Diet Coke Coca-Cola Light Coca-Cola Zero Sugar Caffeine-free Diet Coke Cherry Coke Fanta Orange Fanta Zero Orange Fanta Zero Sugar Fanta Apple Sprite Sprite Zero Sugar Simply Orange Simply Apple Simply Grapefruit Fresca Schweppes Dasani Fuze Tea Glacéau Smartwater Glacéau Vitaminwater Gold Peak Ice Dew Powerade Topo Chico Minute Maid Globally, it is the top provider of sparkling beverages, ready-to-drink coffees, juices, and juice drinks. Through the world’s most extensive beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of over 1.9 billion servings per day. It’s also important to remember that the company owns 19.5% of Monster Beverage (NASDAQ: MNST), which continues to deliver strong financial results.

UBS has a Buy rating and set a target price of $104.

Johnson & Johnson Johnson & Johnson (NYSE: JNJ) is a multinational American corporation specializing in pharmaceuticals, biotechnology, and medical devices. With shares trading at 14.5 times forward earnings and paying a 2.03% dividend, this diversified healthcare giant is a strong buy at current prices.

Johnson & Johnson is among the most conservative of the major pharmaceutical companies, with a diverse product portfolio and a familiar, solid brand. The company researches, develops, manufactures, and sells a range of healthcare products. Its primary focus is on products related to human health and well-being.

The healthcare giant has a payout ratio of just 47%, meaning it pays out less than half its earnings as dividends, which is a healthy cushion. It is also an elite Dividend King with 64 consecutive years of dividend increases. It is one of only two U.S. corporations with a triple-A (AAA) credit rating from S&P, which is higher than the U.S. government’s sovereign debt rating.

The company operates through two segments. The Innovative Medicine segment is focused on various therapeutic areas, including:

Immunology Infectious diseases Neuroscience Oncology Pulmonary hypertension Cardiovascular and metabolic diseases Products in this segment are distributed directly to retailers, wholesalers, distributors, hospitals, and healthcare professionals for prescription use.

The MedTech segment encompasses a diverse portfolio of products used in orthopedics, surgery, interventional solutions, cardiovascular intervention, and vision care. It also offers a commercially available intravascular lithotripsy platform to treat coronary artery disease and peripheral artery disease.

HSBC has a Buy rating with a $320 target price.

McDonald’s McDonald’s (NYSE: MCD) is an American multinational fast-food chain. The legacy fast-food heavyweight is a solid pick whether the economy contracts or expands, and it’s among the safest large-cap restaurant ideas, paying a solid 3.15% dividend. McDonald’s operates and franchises McDonald’s restaurants in the United States and internationally. Independent business owners own and operate about 95% of McDonald’s 13,500 U.S. restaurants.

The company is approaching the 50-year mark to become a Dividend King and is widely seen as a likely entrant, given its consistent dividend growth and durable business model. The company also boasts a global real estate fortress and benefits from trade-down dining during economic downturns and inflationary periods.

The company’s restaurants offer:

Hamburgers and cheeseburgers Chicken sandwiches and nuggets Fries Salads Shakes Frozen desserts Sundaes Soft serve cones Bakery items Soft drinks Coffee Muffins Sausages Biscuit and bagel sandwiches Oatmeal Hash browns Breakfast burritos Hotcakes Jefferies has a Buy rating with a $325 target price for the shares.

NextEra Energy This utility powerhouse announced a bid for Dominion Energy earlier this year, which shareholders have approved, and it offers a dependable 3.12% dividend. NextEra Energy (NYSE: NEE) is an electric power and energy infrastructure company. It operates through its wholly owned subsidiaries, NextEra Energy Resources and NextEra Energy Transmission (collectively the NEER segment), and Florida Power & Light Company (the FPL segment). It is paired with the world’s largest wind and solar energy generation platform. Power demand remains resilient during market crashes.

The FPL segment is a rate-regulated electric utility that generates, transmits, distributes, and sells electric energy in Florida. FPL has approximately 35,052 megawatts of net generating capacity, over 91,000 circuit miles of transmission and distribution lines, and 921 substations.

The NEER segment owns, develops, constructs, manages, and operates electric generation facilities in wholesale energy markets in the United States and Canada and includes assets and investments in other businesses with a clean energy focus, such as battery storage, natural gas pipelines, and renewable fuels. It owns, develops, constructs, and operates rate-regulated transmission facilities in North America.

Morgan Stanley has an Overweight rating with a $111 target price.

Procter & Gamble Procter & Gamble (NYSE: PG) was founded more than 185 years ago as a soap-and-candle company. It has paid dividends to shareholders since 1891, raised them for 68 straight years, and currently pays a 2.96% dividend. The company focuses on providing branded consumer packaged goods worldwide. It is one of the most widely held Dividend Kings, with a portfolio of essential consumer brands that generate steady cash flow through all economic cycles.

Procter & Gamble remains a favorite among concerned investors because its products are used in millions of households every single day. Even during economic downturns, consumers continue buying P&G products, which helps support reliable dividend payments.

The company’s segments include:

Beauty Grooming Health Care Fabric & Home Care Baby Feminine & Family Care The company’s products are sold in approximately 180 countries and territories primarily through mass merchandisers, e-commerce, including social commerce channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores, including airport duty-free stores, high-frequency stores, pharmacies, electronics stores, and professional channels. It also sells directly to individual consumers. It has operations in approximately 70 countries.

Procter & Gamble offers products under these brands and others, such as:

Head & Shoulders Herbal Essences Pantene Rejoice Olay Old Spice Safeguard Secret SK-II Braun Gillette Venus Crest Oral-B Ariel Downy Gain Tide Always Always Discreet Tampax Bounty Citigroup has a Buy rating and a $170 target price.

Contact [email protected] for any questions or corrections.

McDonald's is bringing back its Monopoly promotion Tuesday, giving customers a shot at prizes ranging from free food to $1 million in cash.

The fast-food giant's limited-time game returns Oct. 6 with its familiar peel-off pieces, but gameplay will now be handled through the McDonald's app. Customers can peel a game piece from eligible food packaging and scan it in the app to redeem prizes or participate in additional games.

The promotion comes with a sizable slate of prizes, including a top $1 million cash award, 2027 Jeep Cherokees, Carnival cruise vacations, trips to Kennedy Space Center Visitor Complex and Polaris vehicles. Other prizes include $50,000 toward a home down payment, $50,000 toward college debt, gift cards and free McDonald's food.

The promotion comes with a sizable slate of prizes, including a top $1 million cash award. (Mario Tama/Getty Images)

MCDONALD’S TO SPEND $8.5B ON REVAMPING RESTAURANTS, TECH AND FRANCHISE SUPPORT

Customers can find game pieces on eligible breakfast, lunch and dinner purchases, including Quarter Pounders with Cheese, Egg McMuffins, large fries and large hot and cold drinks.

McDonald's said Chance Card gameplay continues through Nov. 8, with prize claims due by Nov. 22. (Jeffrey Greenberg/Universal Images Group via Getty Images)

Some pieces provide instant food prizes or between 1,500 and 7,000 MyMcDonald's Rewards points. Others allow customers to collect properties for larger prizes or play a digital Chance Card game.

Ticker Security Last Change Change % MCD MCDONALD'S CORP. 233.04 +1.15 +0.50% "MONOPOLY at McDonald's is more than just a game. It's about childhood memories, family moments and surprises that make our day," Alyssa Buetikofer, senior vice president and chief marketing and customer experience officer of McDonald's USA, said in announcing the promotion. "This year, we're giving fans even more reasons to play with bigger prizes, more rewards, and a simpler digital game experience that includes the classic peel."

MCDONALD'S SAYS US SALES SLOWED AFTER VALUE DEAL PUSH FELL SHORT

Customers must register for the game through the McDonald's app and opt in to the company's rewards program to participate digitally. Those who purchase an eligible item through the app or provide their rewards code when ordering can also receive a bonus Chance Card play, provided they registered before placing the order.

Customers can find game pieces on eligible breakfast, lunch and dinner purchases. (Paul Weaver/SOPA Images/LightRocket)

MCDONALD’S SHAKES UP FALL COFFEE LINEUP AS PUMPKIN SPICE SEASON HEATS UP

The promotion runs through Nov. 1 while game pieces last. McDonald's said no purchase is necessary, and its official rules put the overall odds of winning at 1 in 5, with most prizes consisting of food. The $1 million top prize is paid as $50,000 annually for 20 years without interest.

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McDonald's said Chance Card gameplay continues through Nov. 8, with prize claims due by Nov. 22.

Rockland Trust Co. decreased its holdings in shares of McDonald’s Corporation (NYSE:MCD – Free Report) by 6.5% in the 3rd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor owned 47,832 shares of the fast-food giant’s stock after selling 3,338 shares during the quarter. Rockland Trust Co.’s holdings in McDonald’s were worth $11,046,000 at the end of the most recent quarter.

A number of other institutional investors have also added to or reduced their stakes in MCD. Miller Global Investments LLC raised its holdings in shares of McDonald’s by 57.5% during the 3rd quarter. Miller Global Investments LLC now owns 430 shares of the fast-food giant’s stock valued at $99,000 after buying an additional 157 shares in the last quarter. GoalVest Advisory LLC increased its position in McDonald’s by 539.4% during the 3rd quarter. GoalVest Advisory LLC now owns 36,292 shares of the fast-food giant’s stock valued at $8,381,000 after purchasing an additional 30,616 shares during the period. Versant Capital Management Inc boosted its stake in shares of McDonald’s by 23.4% during the 3rd quarter. Versant Capital Management Inc now owns 2,062 shares of the fast-food giant’s stock valued at $476,000 after purchasing an additional 391 shares in the last quarter. Burkett Financial Services LLC grew its stake in McDonald’s by 2,312.5% in the third quarter. Burkett Financial Services LLC now owns 193 shares of the fast-food giant’s stock worth $45,000 after purchasing an additional 185 shares during the period. Finally, Doliver Advisors LP grew its position in shares of McDonald’s by 37.1% in the 3rd quarter. Doliver Advisors LP now owns 5,649 shares of the fast-food giant’s stock worth $1,305,000 after buying an additional 1,528 shares during the period. Institutional investors own 70.29% of the company’s stock.

Analysts Set New Price Targets A number of research firms recently weighed in on MCD. Weiss Ratings lowered McDonald’s from a “hold (c)” rating to a “hold (c-)” rating in a research report on Friday. DZ Bank reiterated a “buy” rating on shares of McDonald’s in a research note on Thursday, September 24th. BMO Capital Markets cut their price target on shares of McDonald’s from $335.00 to $310.00 and set an “outperform” rating on the stock in a report on Thursday, September 24th. Bank of America lifted their target price on McDonald’s from $339.00 to $343.00 in a report on Wednesday, August 5th. Finally, HSBC lowered their price objective on shares of McDonald’s from $357.00 to $356.00 and set a “buy” rating on the stock in a research report on Wednesday, August 5th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, thirteen have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus price target of $298.52.

Read Our Latest Report on McDonald’s McDonald’s Stock Up 0.1% NYSE MCD traded up $0.30 on Monday, reaching $232.19. The company had a trading volume of 2,749,528 shares, compared to its average volume of 4,160,918. The stock has a market capitalization of $164.31 billion, a PE ratio of 18.86, a price-to-earnings-growth ratio of 2.59 and a beta of 0.44. McDonald’s Corporation has a 12 month low of $229.20 and a 12 month high of $341.75. The firm’s 50 day moving average price is $259.04 and its 200 day moving average price is $277.11.

McDonald’s (NYSE:MCD – Get Free Report) last released its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share for the quarter, beating the consensus estimate of $3.32 by $0.06. McDonald’s had a negative return on equity of 572.06% and a net margin of 31.72%.The business had revenue of $7.10 billion during the quarter, compared to analysts’ expectations of $7.13 billion. During the same quarter last year, the business posted $3.19 EPS. The firm’s revenue for the quarter was up 3.7% compared to the same quarter last year. On average, research analysts expect that McDonald’s Corporation will post 12.85 EPS for the current year.

McDonald’s Increases Dividend The firm also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Tuesday, December 1st will be issued a $1.93 dividend. This represents a $7.72 dividend on an annualized basis and a dividend yield of 3.3%. The ex-dividend date of this dividend is Tuesday, December 1st. This is a positive change from McDonald’s’s previous quarterly dividend of $1.86. McDonald’s’s payout ratio is 60.44%.

Trending Headlines about McDonald’s Here are the key news stories impacting McDonald’s this week:

Positive Sentiment: McDonald’s continues to appeal to income-focused investors after increasing its dividend for the 50th consecutive year. The company’s larger payouts provide support for the stock while management works through its operational challenges. Domino’s Pizza Pauses Dividend Growth While McDonald’s Accelerates Payouts Positive Sentiment: The company is pursuing its McDonald’s NEXT growth strategy, which is intended to improve value, traffic and consumer engagement. A successful execution could help restore sales momentum and support a recovery from the stock’s recent weakness. McDonald’s Is Undergoing a Massive New Growth Strategy Neutral Sentiment: McDonald’s disputed reports that artificial-intelligence models are independently determining Big Mac prices. The response may reduce some reputational risk, although continued discussion of personalized or dynamic pricing underscores customer sensitivity to affordability. McDonald’s Responds to Controversial AI Pricing Claims Neutral Sentiment: The return of the Monopoly promotion, including a $1 million prize, could provide a short-term marketing and traffic boost, but it is unlikely to materially change the company’s longer-term earnings outlook. McDonald’s Monopoly Returns Negative Sentiment: McDonald’s is competing more aggressively on value as customers remain price-conscious, but analysts point to execution gaps and weak traffic. The need for sharper promotions could pressure margins while rivals fight for the same budget-conscious consumers. Value Wars Intensify: Can McDonald’s Stay Ahead of QSR Rivals? Negative Sentiment: Shares are declining alongside other restaurant stocks, although Chipotle’s selling has been considerably heavier. McDonald’s stock is near a 52-week low and remains below its 50-day and 200-day moving averages, signaling persistent technical and sector-wide investor caution. Chipotle Sinks as Restaurant Stocks Dip About McDonald’s (Free Report)

McDonald’s Corporation is a global quick-service restaurant company that operates and franchises restaurants under the McDonald’s brand. Its restaurants serve a menu that includes hamburgers, cheeseburgers, chicken sandwiches, French fries, breakfast items, desserts, salads, beverages and coffee. Offerings vary by market, and many locations provide drive-thru service, delivery and digital ordering through the McDonald’s mobile app.

The company operates through a heavily franchised business model, with restaurants owned and operated by independent franchisees, affiliates and the company itself.

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McDonald’s has been sued in federal court in Chicago in a proposed nationwide class action alleging the fast-food company illegally coordinates menu prices across its franchises and company-owned restaurants through an AI-powered pricing system.

The lawsuit, filed on Friday, said McDonald’s violated US antitrust law by conspiring with independent franchisees to fix prices using algorithms trained on nonpublic data.

Reuters reported last week that McDonald’s pricing engine uses machine-learning algorithms to continually analyze data from millions of daily transactions across its nearly 14,000 restaurants.

The lawsuit said McDonald’s violated US antitrust law by conspiring with independent franchisees to fix prices using algorithms trained on nonpublic data. Craig Kohlruss for CA Post The lawsuit cited the Reuters article, which said other fast-food companies are also turning to AI to help with pricing and other operations.

“Independent businesses must set their prices independently,” the lawsuit said.

McDonald’s, in a statement on Monday, called the allegations speculative and uninformed.

“AI does not set the price of a Big Mac or any other menu item,” the company said. It said franchisees make their own pricing decisions, and that the use of pricing recommendation tools and analytics is widespread across industries.

US plaintiffs have filed a wave of class actions in recent years alleging that companies used algorithms or AI to illegally coordinate prices for hotel rooms, apartment rentals and other purchases.

“AI does not set the price of a Big Mac or any other menu item,” the company said Christopher Sadowski for NY Post Lark Turner, a lawyer for the plaintiff, said in a statement, that McDonald’s is “leveraging its troves of data and its franchised system to nickel-and-dime consumers down to the last French fry.”

The plaintiff, an Illinois resident, is seeking to represent a class of potentially millions of McDonald’s customers, the lawsuit said.

Eastern Bank lowered its holdings in McDonald’s Corporation (NYSE:MCD – Free Report) by 63.1% during the 3rd quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The firm owned 53,923 shares of the fast-food giant’s stock after selling 92,066 shares during the period. Eastern Bank’s holdings in McDonald’s were worth $12,453,000 at the end of the most recent quarter.

A number of other institutional investors also recently modified their holdings of MCD. Bank of New York Mellon Corp purchased a new position in McDonald’s in the 2nd quarter valued at approximately $1,359,276,000. Diamant Asset Management Inc. boosted its holdings in shares of McDonald’s by 30,979.0% in the first quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant’s stock worth $806,917,000 after acquiring an additional 2,587,986 shares during the period. J. Stern & Co. LLP grew its position in shares of McDonald’s by 9,867.5% in the fourth quarter. J. Stern & Co. LLP now owns 2,541,008 shares of the fast-food giant’s stock valued at $776,608,000 after purchasing an additional 2,515,515 shares in the last quarter. Arrowstreet Capital Limited Partnership grew its position in shares of McDonald’s by 49.9% in the fourth quarter. Arrowstreet Capital Limited Partnership now owns 3,104,337 shares of the fast-food giant’s stock valued at $948,779,000 after purchasing an additional 1,033,041 shares in the last quarter. Finally, State Street Corp raised its stake in shares of McDonald’s by 2.7% during the 4th quarter. State Street Corp now owns 35,983,997 shares of the fast-food giant’s stock valued at $10,997,789,000 after purchasing an additional 959,140 shares during the period. 70.29% of the stock is currently owned by hedge funds and other institutional investors.

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

Positive Sentiment: McDonald’s continues to appeal to income-focused investors after increasing its dividend for the 50th consecutive year. The company’s larger payouts provide support for the stock while management works through its operational challenges. Domino’s Pizza Pauses Dividend Growth While McDonald’s Accelerates Payouts Positive Sentiment: The company is pursuing its McDonald’s NEXT growth strategy, which is intended to improve value, traffic and consumer engagement. A successful execution could help restore sales momentum and support a recovery from the stock’s recent weakness. McDonald’s Is Undergoing a Massive New Growth Strategy Neutral Sentiment: McDonald’s disputed reports that artificial-intelligence models are independently determining Big Mac prices. The response may reduce some reputational risk, although continued discussion of personalized or dynamic pricing underscores customer sensitivity to affordability. McDonald’s Responds to Controversial AI Pricing Claims Neutral Sentiment: The return of the Monopoly promotion, including a $1 million prize, could provide a short-term marketing and traffic boost, but it is unlikely to materially change the company’s longer-term earnings outlook. McDonald’s Monopoly Returns Negative Sentiment: McDonald’s is competing more aggressively on value as customers remain price-conscious, but analysts point to execution gaps and weak traffic. The need for sharper promotions could pressure margins while rivals fight for the same budget-conscious consumers. Value Wars Intensify: Can McDonald’s Stay Ahead of QSR Rivals? Negative Sentiment: Shares are declining alongside other restaurant stocks, although Chipotle’s selling has been considerably heavier. McDonald’s stock is near a 52-week low and remains below its 50-day and 200-day moving averages, signaling persistent technical and sector-wide investor caution. Chipotle Sinks as Restaurant Stocks Dip McDonald’s Price Performance Shares of NYSE:MCD traded up $0.21 on Monday, hitting $232.10. The company’s stock had a trading volume of 2,703,578 shares, compared to its average volume of 4,160,918. The company has a market capitalization of $164.25 billion, a PE ratio of 18.86, a PEG ratio of 2.59 and a beta of 0.44. The company has a 50-day simple moving average of $259.04 and a 200 day simple moving average of $277.11. McDonald’s Corporation has a 1 year low of $229.20 and a 1 year high of $341.75. McDonald’s (NYSE:MCD – Get Free Report) last issued its quarterly earnings data on Tuesday, August 4th. The fast-food giant reported $3.38 EPS for the quarter, topping the consensus estimate of $3.32 by $0.06. The company had revenue of $7.10 billion during the quarter, compared to analyst estimates of $7.13 billion. McDonald’s had a negative return on equity of 572.06% and a net margin of 31.72%.McDonald’s’s revenue was up 3.7% on a year-over-year basis. During the same quarter in the previous year, the firm earned $3.19 earnings per share. On average, equities research analysts expect that McDonald’s Corporation will post 12.85 earnings per share for the current fiscal year.

McDonald’s Increases Dividend The business also recently announced a quarterly dividend, which will be paid on Tuesday, December 15th. Shareholders of record on Tuesday, December 1st will be given a dividend of $1.93 per share. The ex-dividend date is Tuesday, December 1st. This is a boost from McDonald’s’s previous quarterly dividend of $1.86. This represents a $7.72 annualized dividend and a yield of 3.3%. McDonald’s’s dividend payout ratio (DPR) is presently 60.44%.

Wall Street Analysts Forecast Growth Several equities research analysts have recently weighed in on the company. Weiss Ratings cut McDonald’s from a “hold (c)” rating to a “hold (c-)” rating in a research report on Friday. Tigress Financial raised their price objective on shares of McDonald’s from $385.00 to $390.00 and gave the company a “buy” rating in a research report on Friday, July 17th. Royal Bank Of Canada reduced their price objective on shares of McDonald’s from $290.00 to $285.00 and set a “sector perform” rating for the company in a research note on Thursday, September 24th. Needham & Company LLC reaffirmed a “buy” rating on shares of McDonald’s in a report on Monday, September 21st. Finally, Guggenheim lowered their target price on shares of McDonald’s from $290.00 to $250.00 and set a “neutral” rating on the stock in a research note on Monday. One investment analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, thirteen have issued a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, McDonald’s has an average rating of “Moderate Buy” and a consensus target price of $298.52.

Read Our Latest Report on MCD

McDonald’s Profile (Free Report)

McDonald’s Corporation is a global quick-service restaurant company that operates and franchises restaurants under the McDonald’s brand. Its restaurants serve a menu that includes hamburgers, cheeseburgers, chicken sandwiches, French fries, breakfast items, desserts, salads, beverages and coffee. Offerings vary by market, and many locations provide drive-thru service, delivery and digital ordering through the McDonald’s mobile app.

The company operates through a heavily franchised business model, with restaurants owned and operated by independent franchisees, affiliates and the company itself.

Read More Five stocks we like better than McDonald’s What a $1 Billion Chip Deal Says About Amazon’s AI Ambitions 3 Stocks Benefiting From AI Demand Just Announced Major Buybacks Insiders Are Selling These 3 Stocks, Should You? Datadog’s Rally Has Insiders Selling—Can It Keep Climbing? 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 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%

18.85

$300.64

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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6.54%

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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.

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