McDonald’s stock rating reiterated at Buy by Jefferies on value meals

Jefferies maintained its Buy rating and $360 price target for McDonald's (NYSE:MCD), despite lowering its Q3 U.S. same-store sales estimate to 2.5% and forecasting slightly below-consensus EPS due to recent pricing actions. The firm anticipates improving underlying traffic and same-store sales trends from Q4 through 2026, driven by value offerings and marketing initiatives, alongside a stronger international outlook, expecting the company to gain market share. This positive long-term view is largely consistent with other analyst updates, which generally reiterate positive ratings or raise price targets, despite some maintaining neutral stances.

Analysis

Jefferies has reiterated its 'Buy' rating and $360 price target on McDonald's, signaling strong conviction in the company's long-term strategy despite near-term headwinds. The firm has adjusted its third-quarter U.S. same-store sales growth estimate down to 2.5% from 3.0% and anticipates earnings per share to fall slightly below consensus, attributing the revision to recent pricing actions. However, the core of the bull thesis remains intact, with Jefferies forecasting an acceleration in traffic and sales trends beginning in the fourth quarter and extending through 2026, driven by value offerings, marketing, and a stronger international outlook. This view is broadly supported by other analysts; KeyBanc also projects 2.5% Q3 sales growth, while BMO Capital matches the $360 price target, both highlighting McDonald's leadership in value. While some firms like Bernstein and Stifel hold more neutral 'Market Perform' or 'Hold' ratings, they have still raised or maintained price targets ($320 and $315, respectively) in recognition of the company's value initiatives. Fundamentally, the company's position is supported by an InvestingPro 'GOOD' financial health score and its consistent capital return policy, marked by 50 consecutive years of dividend payments and a current yield of 2.36%.

Key Decisions for Investors

• Investors should weigh the near-term guidance for slightly below-consensus Q3 EPS and a 2.5% U.S. same-store sales growth against the long-term bull case, where analysts see significant upside to the $360 price target.
• Monitor upcoming earnings reports for evidence of the forecasted re-acceleration in traffic and same-store sales in Q4, as this is the critical inflection point underpinning the positive analyst outlook.
• For those with a long-term or income-focused strategy, consider the stock's defensive characteristics, including its 50-year dividend history and 2.36% yield, which may provide stability in a challenging quick-service restaurant market.